Regulatory: The Debt Ceiling Approacheth

John Cooney Now that the threat of a government shutdown has passed, disagreements over the country's fiscal policy will be channeled into debates over raising the debt ceiling. The political maneuvering over this issue could jeopardize the country's single greatest asset--the willingness of other countries to do business in our money.

The debt ceiling is established by a statute that caps the authority of the treasury to borrow money to finance budget deficits. Relatively few countries have such self-imposed limits on their ability to borrow, for most countries, their ability to borrow is determined by the market, through the rate of interest that lenders demand to buy its bonds.

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John Cooney

John F. Cooney is a partner in the Washington, D.C., office of Venable.

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