Does the US Debt Ceiling Debate Affect the Rest?

As the Republicans and the Democrats are haggling over the strategies to be used against the debt ceiling problem, others – the other countries too are trying to surmise the result on the probable default of the country. If the country default sit is not only US which will suffer, but the global economy is going to suffer a lot too. Thus, the debate on the US debt ceiling is important financial information for other countries too.

US debt ceiling debate

The Republicans have been trying to hammer in the idea that significant spending cuts will be of great help for the country and the debt ceiling limit need not be raised debt limit. On the other hand, the Democrats, led basically by President Obama, have been insisting that any kind of cuts should be put off and it will rather be a good idea to increase the taxes especially in regards to the wealthy Americans.

So, what is this debt ceiling? The debt ceiling is the limit till which the US government can borrow from outside sources in order to cover up the gap that it creates by spending more than what it has in its hands. As this happens, the debt amount goes on increasing and now the national debt of the country is set to cross the debt limit. This is nothing new as in the last 50 years, the need to raise the debt ceiling have been faced by the country several times. In fact the debt ceiling has been increased 80 times in 50 years. But now, all are at one with the opinion that some serious action should be taken in order to put a control over the debt amount form increasing.

But, nobody can deny this that if not the cap on the debt ceiling is increased, the country will have to face a serious default. And as a result, other countries may have to suffer too as it will have bad effect in regards to the on the political, social and also the economic scenario of the world.