Debt Ceiling Crisis: World’s Financial System at Risk? #AskTheMoneyGuy
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In recent years, the United States has faced a recurring issue – the debt ceiling crisis. It is a political conflict that arises when the government reaches its borrowing limit and cannot legally borrow any more money to fund its expenditures. This often leads to a shutdown of government services, unpaid debts and payments, and potential global financial instability.
The effects of the debt ceiling crisis have far-reaching consequences on the economy, the financial sector, and the world as a whole. It puts the world’s financial system at risk as the US government, with its economic superpower status, is one of the most important players in the global economy.
Firstly, the debt ceiling issue can weaken the US dollar, which is the world’s reserve currency. If the government cannot meet its financial obligations and defaults on its debt payments, the value of the dollar may fall. This can lead to a domino effect on the global financial markets, leading to a recession and potentially triggering a global currency crisis.
Secondly, the uncertainty and instability of the crisis can cause a flight of capital from the US to other countries. Foreign investors may lose confidence in the US economy and its credibility to pay its debts, leading to a decline in investments. This could reduce the availability of credit, increase borrowing costs and reduce economic growth in the US and across the globe.
Thirdly, the government shutdowns arising from the debt ceiling crisis can lead to increased unemployment, reduced government services and a decline in consumer confidence. This will have a powerful impact on the US economy, which is the world’s largest. It is also likely to negatively affect emerging economies that are reliant on the US market.
Overall, the debt ceiling crisis highlights the interconnectedness of the global financial system and the importance of the US as a key player in this system. The risks associated with the debt ceiling crisis must be addressed proactively, and a long-term solution must be found to prevent further disruptions to the global economy.
In conclusion, the debt ceiling crisis is a critical threat to the world’s financial system. Its impacts on US government finances, currency value and global investor confidence can cause harm to people and the macroeconomy. To prevent potential catastrophes, the US government must take a more constructive and coordinated approach to addressing this recurring issue.
@themoneyguyshow does the advice change if it's not a vacation home and it's a rental or a primary residence you're moving into and you are trying to put 20%+ down?
I'm definitely not a car guy. I hate driving expensive cars, it makes me nervous that somebody will ding it in the parking lot or smash in the windows to look for valuables or something. If someone gave me an expensive car I'd immediately sell it and go back to my used camry.
SoFi has been phenomenal for me. I switched from ally who was also very good.
34:50 I'm a car guy, on step 8. Bought used, w/ cash, $28k Porsche.
I feel this is the best financial channel on YouTube. Just solid advice and guidance. Hope your channel continues to grow.
This recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. No more manipulation of other economies in order to control inflation. Sure is obvious that a new multilateral world order is in the works.
Notice when there is a Republican President there is a gigantic crisis but with a Democrat, the headlines are they are the savior? This time is all Kevin McCarthy’s fault.
Some of us gov employees have to work during a shutdown, and back pay isn’t guaranteed until it is
It's an arbitrary limit that the congress imposed on themselves.
They play this dumb game every couple of years… They don't pay the park Rangers for a few days… They all give a little and then they raise the stupid thing! Its just another dumb way for 1 side to get something else. RIDICULOUS!!!!
Good work… 0% chance they let us default… it would be suicide for most of those idiots in Washington and their careers… Enjoy the run up and as the market reacts ABB… and buy low… this is totally for show. Great job guys reminding us to just keep on keeping on…
@moneyguyshow – just so you know, military do not get a day off like some federal employees. They have to continue work unpaid (although eventually getting back pay) along with “mission essential” federal employees. I just want to make sure it isn’t viewed as a “day off” for military and in fact can be a stressor to military families. I know your intent wasn’t to miss categorize it as a vacation or time off.
Thanks sleepy joe
Unknowingly knowing — I’m gonna use that
No, they don't give everybody back pay, usually government contractors get screwed.
Your financial order of operations doesn't say when to buy a house. I live in an expensive city so when does the order of operations indicate that I should be saving & buying a home?
Meh, talking heads will talk. Just ignore the noise, keep on DCAing on.
I actually disagree with this assessment – yes they will eventually reach some sort of deal. However this time is different, before (particularly in 2011) there was universal understanding that default was not really an option – despite all the drama. This time you have a significant minority of Republicans in the House that have plainly stated they will not make concessions of any kind. What is more, the old school fiscal conservative who ultimately cares about their consequences would negotiate in good faith. The far right wing of the Republican Party simply does not care if we go into recession because of this – they have said as much out loud into the microphone already (they’ve certainly avoided saying this is something they want to avoid explicitly). So will our nation survive this, yes. Will we get the ship righted eventually, yes. But will there be a catastrophic collapse in bond prices causing a huge swath of banks to become insolvent overnight causing a 2008 style recession – actually very much maybe.
Hot diggety dog? What? No. You're a public employee. You still got a mortgage to pay. And you are already making 25% or more less than your value in the private sector.
MOST rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them
Definitely enough bloopers for some new Shorts 😀
thank you the knowledge!!
As a federal employee working for the Navy, I’m not excited. Just because you get furloughed doesn’t mean the works stops. Support for our deployed sailors suffers because of politics in Washington.