Raising the debt ceiling is how we ended up with a $20 trillion debt. Is the debt ceiling becoming a joke? It is the same theory as a speed limit sign that is never enforced. Short-term, there are positive consequences to raising the debt ceiling. The US will continue to pay its bills and avoid a total debt crisis. This debt ceiling was implemented as the only restraint to be enforced on out-of-control government spending.
Social Security and Medicare are the two premier federal entitlements that are the primary drivers of the long-term debt.
The government is now hitting it’s limit on borrowing to cover revenue shortages and, therefore, must raise the debt ceiling or suffer the consequences of a first time ever default by the US Treasury.
Any failure to raise the debt ceiling will cause irreversible damage to the US credit rating. This would trigger an uproar in both the US and global markets. The future cost of borrowing, postponing Social Security payments and tax returns, as well as forcing layoffs of non-essential government workers, will certainly take the steam out any new future highs of the stock markets.