It’s time to talk about the debt ceiling, and why it matters to feds. As of October 13, the House and Senate have both passed legislation to raise the debt ceiling by $480 billion. This is enough to last until early December, kicking the can ever so slightly farther down the road without actually solving the problem. Currently, the federal government is slightly over $28 trillion in debt, as spending money is popular, but raising taxes to pay for it is not. In order to pay back the debts already incurred Congress needs to raise the debt ceiling. If it does not raise the debt ceiling, the government defaults on its debts.

What happens if the United States – arguably the world’s most important economy, and holder of the world’s main reserve currency, the dollar – defaults on its debts? According to Business Insider, “Defaulting on government debt could drag the country into an economic recession. Spending on critical programs would freeze. The dollar's strength would likely plummet. And financial markets would slide into uncharted territory as investors brace for an unprecedented economic catastrophe. There's an even greater risk. The dollar is the world's reserve currency, meaning other governments depend on it holding its worth. A default on US government debt would dramatically shake that confidence. The dollar's value could plummet as the world financial system prices in a dollar that isn't reliable — or seeks an alternative.”

If that sounds almost incomprehensibly bad, you’re in the right ballpark. But what would it mean for feds? The United States has never defaulted on its debts before, which means there is a lot of uncertainty in this question. The Bipartisan Policy Center estimates that the federal government would only be able to sustain about 60% of current spending in the event of a default.

Government Executive states that, if the debt ceiling is breached, “the government could ask employees to continue working and simply give them ‘IOUs’ until the debt limit was addressed.” Obviously, this would be abusive to federal workers and is generally unacceptable, which is why FMA is working to convince Congress to stop playing games with the livelihoods of federal workers, and the stability of the global economy, and to raise the debt ceiling so that the United States government can pay back the debts already accrued to it.