While everyone focused on avoiding the fiscal cliff, we cracked our head on the debt ceiling. On Monday, the U.S. government reached the statutory limit on how much money it can borrow. Get ready for the next big budgetary fight—and this time expect a much bigger hit to your pocketbook.
Treasury Secretary Timothy Geithner told Congress on Monday that emergency measures were now in effect to prevent Washington from defaulting on its debt. America has begun a “debt issuance suspension period” that would last through February 28, he said. We have less than 60 days to raise the debt ceiling, which is currently set at $16.394 trillion. If we don’t, our creditors will soon stop being paid. A debt default could have drastic implications on how much America pays to borrow money.