Will the U.S. Default?  Debt Ceilings, Government Shutdowns, and the National Debt

Will the U.S. Default? Debt Ceilings, Government Shutdowns, and the National Debt

Why the U.S. is closing in on both a debt default and a government shutdown.

Topics covered include:

  • How a government shutdown differs from a debt ceiling crisis
  • Why hasn't Congress passed legislation to fund the government and raise the debt limit
  • How refusing to increase the debt ceiling could impact Social Security
  • How big is the national debt and who owns it
  • Why we never know how much federal debt is too much: Japan vs the U.S.
  • How federal debt is used and how it has led to financial innovation
  • Why countries default on their debt
  • What are some of the challenges with central banks pegging interest rates and monetizing the debt
  • What could cause the U.S. dollar to crash and inflation to soar

Thanks to Alto CryptoIRA and LinkedIn for sponsoring the episode.

For more information on this episode click here.

Show Notes

America’s debt ceiling is a disaster, though fiscal rules can help—The Economist

Treasury Bulletin, September 2021—Bureau of the Fiscal Service

Major Foreign Holding of Treasury Securities—Department of the Treasury/Federal Reserve Board

Fed official warns of ‘extreme’ market reaction unless debt ceiling raised by Lauren Fedor, Colby Smith and James Politi - The Financial Times

Republicans Are Playing a Dangerous Game With Debt by Michael R. Strain—The New York Times

Explainer: What happens when the U.S. federal government shuts down? by Jason Lange—Reuters

Janet Yellen Says Treasury Could Exhaust Cash Reserves by Oct. 18 if Debt Limit Isn’t Raised by Nick Timiraos and Kate Davidson—The Wall Street Journal

Janet Yellen: Congress, Raise the Debt Limit by Janet Yellen—The Wall Street Journal

Devin Carroll on YouTube

In Defense of Public Debt by Barry Eichengreen, Asmaa El-Ganainy, Rui Esteves, and Kris James Mitchener

Different Types of Central Bank Insolvency and the Central Role of Seignorage by R. Reis

How do central banks control inflation? A guide for the perplexed by Laura Castillo-Martinez and Ricardo Reis—London School of Economics and Political Science

Can the Central Bank Alleviate Fiscal Burdens? by Ricardo Reis—London School of Economics and Political Science

Related Episodes

295: Federal Reserve Insolvency and Monetizing the National Debt

338: The National Debt, Inflation, and the U.S. Dollar—What Could Go Wrong?

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