Question

What is the debt ceiling? When and why was it created? Discuss the pros and cons for raising the debt ceiling.

Answer 1

it is an upper limit set on the amount of money that a government may borrow.

its hard to do a pro/con list. If the debt ceiling isn't raised, it will have immediate and significant negative effect on the US economy that will range from a sharp economic downturn to a prolonged depression depending on how long it goes on for. It will take billions of dollars out of the economy as millions of payments aren't sent out. People who rely on social security, medicare and medicaid payments, government contractors, federal employees - including soldiers - will not get paid. Businesses that rely on them for income will suffer, and that will radiate throughout the economy. The US government's credit rating will be downgraded, increasing the cost of raising money through bonds in the future. If it is never raised the US government will cease to be able to function.

There is no negative outcomes for raising the debt ceiling. The argument for not raising the debt ceiling conflates going into debt with paying your debts. You can also argue that going into debt is a bad thing, but not raising the debt ceiling will not prevent the Federal government from accumulating debt .Indeed it will increase the amount of debt.