Analysis By Adarsh Gupta
America has once again hit its debt ceiling. The national debt of America crossed the $31.46 trillion mark in January this year.
If the US government does not raise its debt ceiling, then the USA will default by the end of this month.
President Joe Biden is scheduled to attend the emergency meeting related to the US Debt crisis just after landing at the US from the G7 summit.
In the past, war funding used to be the major reason behind the huge national debt. After WW2 total US debt reached 100% of its GDP
The high national debt is not bad. The US Treasury Department collects taxes and uses them to fund the federal government.
But the revenue collection often falls short of total spending causing huge budget deficits.
The deficit in the US has been increasing over the years, and in 2019, it crossed the $1 trillion mark.
The ruling government of any country can take a debt only up to a limit according to the law of that country. This legal limit is called the debt ceiling.