US Debt Ceiling: The US Congress's Annual Economic Puzzle?

US government debt has hit the ceiling set by Congress, while the US Treasury is gradually running out of funds for public expenditures in the coming weeks. If Congress delays raising the public debt ceiling, the US could face default risk as in 2011. However, raising the debt ceiling without any conditions would harm the sustainability of financial markets and increase debt repayment pressure on citizens (through tax increases).

This week's Macroeconomics section of Viet Hustler will return to Debt Crisis, one of the two thorny issues of Twin crisis that the US is currently facing. The article will clarify the main points below:

• How do governments around the world cope with public debt? Can this be applied to the US?

• Debate between the US House and Senate on raising the debt ceiling.

• Link between debt ceiling policy and the current credit crunch situation. 

What you need to know about the public debt crisis