We get it — most of the population sees “debt ceiling” and their eyes roll back so hard, it’s a wonder their peepers don’t shoot out the back of their skulls.

But with America one week out from a critical deadline, it’s time for everyone’s collective heads to get in the game.

The debt ceiling…

… is a cap set by Congress limiting how much money the US government can borrow to pay its bills.

Still awake? Great.

If the limit isn’t raised, the Treasury Department says it’ll run out of money and start defaulting on payments as soon as June 1.

A federal default hasn’t happened before. What would it mean? To start:

  • Social Security checks and tax refunds may be halted.
  • Federal employees (including active military) may not be paid.
  • Stock markets may panic.

The only time-tested way to make all that not happen? Congressional action.

Oh, them? Not good

Debt ceiling negotiations have become increasingly politicized.

The tense 2011 cap-extension standoff lost taxpayers $1B and downgraded US credit; bipartisan deal-making hasn’t exactly improved since then.

How worried should you be?

Medium worried, at least. President Biden and Speaker McCarthy continue to negotiate, but Wall Street is getting jittery.

If lawmakers can’t reach a consensus, some secondary maneuvers could temporarily extend the deadline — but in a hyperdivided Congress, those tricks aren’t certain to work.



If nothing happens and the feds default, the real-life impacts would be massive:

  • Retirement funds may plummet.
  • Medicare and Medicaid may see disruptions.
  • Credit card interest rates may rise.
  • Mortgage rates may improve…
  • … Nah, they’d somehow get even worse; just making sure you’re still awake.

In other words, debt ceiling news ain’t sexy, but it’s worth engaging with.

Can you go back to bed now?

If you can sleep after this, good for you.

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