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Debt Ceiling Craze

Congress has decided to avert a default, and the government will continue to keep borrowing money. This still has an effect on the economy even after months of negotiation. The Treasury has little to no money left and now they must continue to borrow money to regain their losses and replenish the money.

The balance on the treasure just fell to $23 billion. Although this may sound like a lot, typically the treasury tries to keep a balance of at least $500 billion. This is so they can cover about a week or bi-weekly cash outflows. The government will now try to regain the money back by selling bills and bonds. Government bills will likely be the most used for this because they pay out quickly and are better for short-term debt sales. Forecasting says that there is likely going to be $1 trillion worth of bills sold over the next 3 months.


Default: When a Government fails to pay its debts.

Bill(Treasury-Bill): Short-term debt obligation sold by a government with a maturity of a year or less.

Bond(Government Bond): Debt security issued by a Government(In this case, the US Treasury)

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