by: Scott Wickersham Updated:
For decades, the United States has spent more money than it makes through taxes and borrowing cash from countries like China and Japan.
We can't go above what is called the debt limit that has been raised many times in the past and is now at $16.7 trillion.
The country has hit that mark and needs to borrow more to cover the budget lawmakers approved.
Economist John Connaughton said we aren't even close to defaulting on our loans calling the deadline drama and political theater than real economic concern.
"We cannot issue any more debt," he said. "We will still pay our debt, we just won't have Treasury bill auctions.
Those auctions are how the United States borrows cash.
But the country still has tax revenue coming in as quarterly estimated tax payments were due yesterday.
There will be big loads of checks coming into the Treasury starting Wednesday through Friday.
Still, we will eventually need to borrow more.
A deal would allow the Treasury to continue borrowing through Feb. 7 and the government would reopen through Jan. 15.
If we pass that new deadline, and more importantly, if the United States actually missed a loan payment, markets could crash and dump the value of 401(k)s. Loan interest rates would rise and payments for Social Security, unemployment and tax refunds could be in question.
Connaughton doubts that will ever happen but thinks the debt ceiling deadline drama will return this winter.
"I think that's the one Republicans will hold out all the way to February because that's the one they have the most leverage on," he said.