On 17th of May, Australia had to cancel the upcoming Quad summit in Sydney after US President Joe Biden cut short his Asia tour due to debt ceiling negotiations in Washington. But what is Debt Ceiling and why it is being regarded as a big gaint that might big a big blow to America.

Debt ceiling is the maximum amount of money Congress allows the government to borrow to cover its bills. Since 1917, United States has a law that sets a statutory limit on the total amount of debt that the Government is allowed to have. Initially the limit was $11.5bn (£9.2bn) but from government to government the limit has been increased.

The ceiling has been raised more than 100 times and now stands at $31.4 trillion. US government debt hit this level in January, which means that the Government cannot legally borrow any more money. So if the government does not raise the debt ceiling, it means it defaults on its bills and will runs out of money and also it can’t borrow anymore. Treasury Secretary Janet Yellen said it would lead to an economic catastrophe. Treasury Secretary of United States Janet Yellen said “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,”

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