I’ve heard about Oct. 17 th being an important day in the news. What’s going on? I heard it’s something about debt or ceiling. What does that mean?

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Presentation transcript:

I’ve heard about Oct. 17 th being an important day in the news. What’s going on? I heard it’s something about debt or ceiling. What does that mean?

Debt (FYI: Red represents debt. Black represents money we have.) Debt = money owed Ex: If I borrow $20 from you, I’m in debt $20. In other words, I’m indebted to you in the amount of $20. I will owe you $20 (plus interest, if you charge it).

Debt Ceiling Debt Ceiling = Limit on how much the government is allowed to owe (borrow) for spending it has committed to. – The government has promised to pay Social Security, Medicare, federal workers, fund the armed forces, etc. – The government does not collect enough tax money to cover all of its commitments (bills) – So, the government borrows money to pay its bills. It also has to pay interest on the money borrowed. – There is a limit on how much the government is allowed to borrow. This is called the debt ceiling.

Debt Ceiling, Cont. – Because the government don’t collect enough taxes to pay off our debt, the government pays some money each month to the lenders. The minimum amount we are allowed to pay is the interest on the loan. If we don’t pay the interest, we go into default on the loan. Default is bad! – So, if by Oct. 17, the debt ceiling is not raised, we will run out of our ability to borrow money to pay for all the things we have promised. The government will only be able to spend what it takes in.

The U.S.’s Debt Ceiling We are getting close to that ceiling. On October 17, the government will have $30 Billion to pay off it’s debts. The problem is that we will owe $60 Billion on October 17 th. So we’re short funds.

The Best Solution The best solution is for the government to get the debt ceiling solved so that there’s enough money to pay for everything in full.

What if we don’t raise the debt ceiling? We would only be able to partially pay our debts. Think about it: – Where would this leave federal employees who have been promised paychecks? – Veterans who have been promised benefits? – Elderly who have been promised healthcare payments? – How is the American public going to feel? – Do you think every family would be impacted? – Once our government pays it’s commitments in the U.S., who will they still owe money to?

Time Ticks Away ‘Til October 17 th