WASHINGTON, D.C. (Erie News Now) — The U.S. is nearly $31.5 trillion in debt, and quickly approaching the upper limit of it’s debt ceiling, which would prevent them from taking out any more loans.
The U.S. uses these loans to pay for Medicare, military pensions, and other government funded projects. Congress has the ability to raise the debt ceiling, but Republicans are currently posed to fight against raising the debt ceiling again, saying they want to lessen government spending.
But if the U.S. reaches it’s debt limit, and the ceiling isn’t raised by Congress, the U.S. may default on it’s debt, it could potentially causes a stock market crash, a recession, and due to America’s position as a world economic leader, economic hardships around the globe.
“If that ceiling is not allowed to go higher, than the government would have problems paying the federal pensions,” said Roland Kljunich, owner/president of Roland Financial Wealth. “They would have problems paying Social Security payments, have problems paying for Medicare, things that the government does… all of that, they just wouldn’t be able to pay it.”
Despite a potential political battle over the debt ceiling on Capitol Hill, Kljunich says the average American shouldn’t worry.
“Don’t panic… I always look at things where we have to really see what the reality is,” continued Kljunich. “Sometimes things get a little sensationalized. Some sometimes things are going to be politicized.”
But Kljunich says times like these are a reminder to have a good budget set up.
“Make sure that you have a good budget,” said Kljunich. “Make sure that you have some cash aside. Hopefully, you have at least a three or six month emergency fund of all your expenses. So just in case something did happen [where] you needed some excess cash, you have that on hand.”
Since 1960, the U.S. debt ceiling has been raised 78 times.