U.S. has hit the debt ceiling- how does this affect you?

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BOWLING GREEN, Ky.-The United States has hit the debt ceiling, a limit of $31.4 trillion. How is this going to affect you?

The short answer is it’s not going to affect you and your money right now.

The debt ceiling is the legal limit on how much outstanding debt the government can have. Once the government hits that number they are not allowed to borrow anymore…until Congress raises the ceiling again.

Democrats and Republicans must now work together to reach an agreement of how much to raise the debt limit. If they can’t agree and ‘default’, the results could be catastrophic.

“It’s so bad that we think no politician whether on the right or left in their right mind would let it get to that point. But it is worth pointing out that if the government gets to that point it could be extremely, extremely bad,” said WKU Assistant Professor of Finance Christopher Biolsi.

Defaulting could result in big consequences like raising doubts about our country’s economy, a recession, and a stock market crash.

It’s more likely than not that the debt limit will be raised again. It’s been raised 45 times in the last 40 years.