What does raising the debt ceiling mean? Can I call my credit card ...

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Question by Spaced Frehley: What does raising the debt ceiling mean? Can I call my credit card organization and raise my debt ceiling?
By raisilng the ?debt ceiling? is that the exact same as saying ?we?re not in debt? until we reach X amount of debt? What does China and the other countries think of America raising the ?debt ceiling?? Is raising the ?debt ceiling? a way of putting off the American debt until the next Presidential election? Bush raised the ?debt ceiling 7-8 times? and we still inherited a large debt.

Greatest answer:

Answer by CAustin IV
The debt ceiling is self-imposed. It?s much more like telling oneself that you will not accumulate far more than $ 500 on your credit card than it is like your actual credit limit.

Our actual credit is limited by our capacity to pay our creditors? interest back (our creditors, incidentally, aren?t some type of world bank, but rather are millions of individual investors who buy bonds). Countries have credit ratings, as do currencies ? if we began defaulting on our debt, investors worldwide would no longer think about it wise to buy bonds and currency from the United States, and we would no longer be able to spend into the deficit, since we would have nowhere to get credible cash. (Deficit spending, contrary to what some extremely idiotic pundits would have you believe, has absolutely nothing to do with ?printing money? in the United States.)

There is no set numerical limit at which point the United States? credit rating suddenly collapses ? it is a matter of whether we can make excellent on our interest, not a matter of regardless of whether we have $ 10 trillion in our pockets (just like your mortgage ? not getting your house?s value in cash on hand does not hurt your credit rating falling behind on your payments would). The only concrete and immediate drawback is that the much more we borrow, the far more we have to pay in interest. Currently interest consumes about 7% of the federal budget.

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Spanish Prime Minister Jose Luis Rodriguez Zapatero and his political opponents in parliament have agreed to work together to swiftly change Spain?s constitution and put a legal limit on how considerably the government can borrow. It is portion of moves by Madrid to prove to nervous economic markets they can control their finances. The strategy is to alter the constitution just before elections in November. ? www.euronews.net
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