"US government hit its $31.4 trillion debt ceiling"

" US government hit its $31.4 trillion debt ceiling \r\nThe U.S. officially hit its $31.4 trillion debt ceiling on Jan. 19 \u2014 launching a ticking time bomb toward a potentially \u201ccalamitous\u201d debt default.\r\n\r\nUnable to break the political deadlock in Congress, the Treasury will now take \u201cextraordinary measures\u201d to ensure the government can pay its bills.\r\n\r\nThe emergency measures are due to expire on June 5, according to Treasury Secretary Janet Yellen - triggering fears of a nasty fallout for Americans.\r\n\r\nHere are three ways it could hurt you.\r\n Freezing social support \r\nThe Council of Economic Advisers (CEA) - an agency that advises the President on economic policy - has painted a grim picture of life after debt default.\r\n\r\nEvery single American could feel the impact.\r\n\r\n\u201cPayments from the federal government that families rely on to make ends meet would be endangered,\u201d the CEA explains. \u201cThe basic functions of the Federal government\u2014including maintaining national defense, national parks, and countless others\u2014would be at risk.\r\n\r\n\u201cThe public health system, which has enabled this country to react to a global pandemic, would be unable to adequately function.\u201d\r\n\r\nWhat does that mean for individual households?\r\n\r\nIt means that the government could delay various paychecks that help millions of Americans, such as Social Security payments, Medicare and Medicaid, and benefits to veterans.\r\n\r\n Market turmoil \r\n\r\nHistory has a tendency of repeating itself and this does not bode well for America\u2019s eleventh-hour debt ceiling decision \u2026 or\u00a0 your investments .\r\n\r\nIn 2011, Congress approved a debt ceiling extension with just hours to spare before the Treasury would default.\r\n\r\nThis close call prompted credit rating agency Standard & Poor\u2019s to strip the U.S. of its prized AAA (outstanding) rating, removing it from its list of lowest-risk countries. The agency cited dysfunctional policymaking in Washington as a factor in the downgrade.\r\n\r\nSkittish investors reacted quickly and the stock market tanked. It took the S&P 500 index almost six months to recover.\r\n\r\nWhat\u2019s happening today is similar.\r\n\r\nThe coming months of \u201cextraordinary measures\u201d look set for a long, drawn-out political wrestling match, with opposing Republicans using their votes on an extension as leverage to seek spending cuts.\r\n\r\nAs things stand, another down-to-the-wire debt ceiling extension seems likely.\r\n\r\nThis could cause a storm for the S&P 500 index, which suffered a 19% decline in 2022.\r\n\r\n Credit card and mortgage rates \r\n\r\nCredit card interest rates, as well as other interest-bearing loans like mortgages and auto loans, are tied to the health of the U.S. economy - which is facing dire straits in this debt default debacle.\r\n\r\nThe Federal Reserve raised its key short-term interest rate by another 0.25 percentage point earlier this month,\u00a0 pushing borrowing costs \u00a0to the highest level since 2007.\r\n\r\nWhen the fed funds rate goes up, the prime rate - the interest rate banks lend to customers with good credit - also increases.\r\n\r\nThis means borrowers must pay higher interest rates on their credit card balances. Mortgages could also become more expensive for American families.\r\n\r\nAccording to the CEA: \u201cThese and other consequences could trigger a recession and credit market freeze.\u201d\r\n\r\n A precious way to protect yourself \r\n\r\nWith the U.S. balance sheet in such a precarious position, your 401(k) or IRA \u2014 and your retirement itself \u2014 could be at risk.\r\n\r\nYou could try to adjust your retirement accounts for better protection, but there\u2019s a lesser-known alternative that could pay off big.\r\n\r\nA Gold IRA is a type of individual retirement account that allows you to invest in gold and other precious metals in physical forms, such as coins, instead of stocks, mutual funds and other traditional investments.\r\n\r\nIt\u2019s a great alternative because unlike the U.S. dollar, which has lost 98% of its purchasing power since 1971,\u00a0<a class=\"link rapid-noclick-resp\" href=\"https:\/\/moneywise.com\/investing\/alternative-investments\/gold-makes-owning-retirement-simple?throw=GOLD1&utm_source=syn_oath_mon&utm_medium=Z&utm_campaign=24577&utm_content=oath_mon_24577_gold%E2%80%99s+purchasing+power+remains+more+stable+over\" target=\"_blank\" rel=\"nofollow noopener\" data-ylk=\"slk:gold\u2019s purchasing power remains more stable over time\" data-rapid_p=\"23\">gold\u2019s purchasing power remains more stable over time .\r\n\r\nOpting for a Gold IRA gives you the opportunity to both diversify your portfolio and stabilize your finances.\r\n\r\nIf you want to open a Gold IRA,\u00a0 there are reputable services \u00a0that\u2019ll let you roll over your current 401(k) or IRA into this new account \u2014 and quickly."

"US government hit its $31.4 trillion debt ceiling"

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