Option for a topic related to Public Finance: Debt Ceiling.
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The debt ceiling is the maximum that the government can borrow by law and was first set with the Second Liberty Bond Act of 1917. Congress has raised the cap many times since then, and the last time was under the Budget Control Act of 2011. Congressional “gridlock” and the failure of a “super committee” formed to find cuts in spending led to the fiscal cliff issue, and looming problem of hitting the debt ceiling. A “fiscal cliff” was narrowly averted on January 1, 2013 by increasing some taxes and delaying a decision on increasing the debt ceiling. The consequences of hitting the debt ceiling, and not raising it, would be catastrophic because the government would default on its obligations.
The debt ceiling has been raised many times before, and the economy is still very sluggish, so one has to wonder why the debt ceiling wouldn’t be raised again as a non-issue. This time, the decision to raise the debt ceiling is different for a few reasons. In the past, debt grew somewhat in line with gross in the gross domestic product. Also, for much of the country’s past, the debt was owed to its own citizens. In addition, more...