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What Happens If The U.S. Defaults On Its Debt? Here's Why It Won't

Money For the Rest of Us

CHAPTER

The Debt Ceiling and the Future of the Federal Reserve

The U.S. Constitution grants Congress the power to borrow money. The executive branch can only spend money that's been authorized by Congress as part of laws. Even if the debt ceiling is eventually raised, default secured, there's the potential for higher longer-term interest rates. If we look at total public debt now, which is $31 trillion, it's 120 percent of GDP or the size of the United States economy.

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