Congressional Agreement on Debt Ceiling Is It Enough to Keep the Economy Afloat

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The recent agreement between House Republicans and President Joe Biden to suspend the debt ceiling until the end of next year undoubtedly provides a crucial respite for the government to avoid possible economic consequences. However, it doesn’t guarantee a long-term solution to the core issue of accumulating debts.

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As a starting point, suspending the debt ceiling will ensure the government can pay its financial obligations without any limitations. It is essential, especially in the midst of a pandemic, to have sufficient funds to address the immediate needs of citizens, such as military salaries and Social Security benefits. Moreover, this agreement also includes provisions for government funding until later this year, promoting a degree of stability in uncertain times.

Alternatively, some critics argue that this agreement postpones the inevitable. The government has been accumulating debts for decades, and suspending the debt ceiling only kicks the can down the road. The rising amount of public debt has long-term implications, such as higher interest rates, inflation, and a decrease in the value of the dollar. These concerns are all the more pressing given that by the end of the suspension period, the accumulated debt will be 30 trillion dollars, an unprecedented amount.

Wrap, while it is commendable that the government has agreed to suspend the debt ceiling, it is not enough to ensure long-term stability. A grander solution may require a policy shift towards more fiscal responsibility to mitigate the current and future risks of accumulating large amounts of debt.

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