US House Passes Bill to Suspend Debt Ceiling, Preventing Potential Financial Crisis

Updated: Aug 30, 2023

📢 THE MONTHLY BOOST 📢

June 2023 Edition

🏛️ US House Passes Bill to Suspend Debt Ceiling, Preventing Potential Financial Crisis 🏛️

Welcome to the latest edition of THE MONTHLY BOOST! In this month's focus, we bring you breaking news, that the House of Representatives has passed a bill to suspend the debt ceiling. This historic decision aims to prevent a potential financial crisis and ensure the stability of the nation's economy.

Let's dive into the details!

What Is the Debt Ceiling?

The debt ceiling is the amount of money the U.S. Department of the Treasury is authorized to borrow to pay the nation’s bills.

Those obligations include Social Security and Medicare benefits, tax refunds, military salaries, and interest payments on outstanding national debt.

The current ceiling is about $31.4 trillion. The U.S. hit that borrowing limit in January.

Us House Passes Bill to Suspend Debt Ceiling Just Days Before Default

The House passed a bill to suspend the debt ceiling on May 31st, 2023, clearing a major legislative hurdle with just days left before the US is expected to default.

The final House vote was 314 to 117, with 149 Republicans and 165 Democrats supporting the measure. In a potentially worrisome sign for the House Republican speaker, Kevin McCarthy, 71 members of his conference opposed the deal that he brokered with President Joe Biden.

The Suspension Of The Debt Ceiling Impact On The Real Estate Market

The impact of the debt ceiling suspension on the real estate market is influenced by various factors and can be complex. The actual effects will depend on the broader economic conditions, market dynamics, and the specific policies implemented during that period.

Here are a few potential impacts:

1. Interest Rates:

The debt ceiling directly influences the government's ability to borrow money, and if it is suspended, it allows the government to continue borrowing without restriction. This increased borrowing can lead to higher levels of government debt, which in turn can put upward pressure on interest rates.

2. Economic Stability:

The suspension of the debt ceiling can contribute to a more stable economic environment. Without the threat of a potential default on government debt, financial markets may feel more confident and stable. This can positively impact the real estate market by boosting consumer confidence and encouraging investment in properties.

3. Housing Policies:

The government's ability to address housing policies and regulations can also be influenced by the suspension of the debt ceiling. Without the pressure of immediate debt constraints, policymakers may have more room to enact changes that impact the real estate market. This could include reforms related to mortgage regulations, affordable housing initiatives, or tax policies that can have a direct effect on the real estate industry.

A Recent History of the U.S. Debt Ceiling

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What is the economic outlook for the U.S.?

The economy in 2023 will present a mixed picture. While underlying momentum has slowed, this was anticipated following last year’s unexpectedly healthy growth pace. The policy is playing a large role in this slowdown. The Fed has raised rates to tamp down high inflation, and fiscal policy is becoming more restrictive. Thankfully, the economy is entering this next period in a relatively strong position which should help to mitigate any negative impacts. While economic growth will inevitably decrease, we do not yet see a recession as a foregone conclusion.