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State defaults in the United States are instances of states within the United States defaulting on their debt. The last instance of such a default took place during the Great Depression , in 1933, when the state of Arkansas defaulted on its highway bonds, which had long-lasting consequences for the state. [ 1 ]
By 1841, nineteen of the twenty-six U.S. states and two of the three territories had issued bonds and incurred state debt. [1] Of these, the aforementioned states and territory were forced to default on payments. Four states ultimately repudiated all or part of their debts, and three went through substantial renegotiations. [2]
"Without enough money to pay its bills, any of the payments are at risk, including all government spending, mandatory payments, interest on our debt and payments to U.S. bondholders.
The Congress shall have power . . .To borrow Money on the credit of the United States; Amendment XIV, Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
The U.S. needs to keep borrowing to fund expenditures, and a default would make that stop immediately. Internationally, the U.S. dollar is where countries keep their currency for international ...
Yellen, in a letter to House and Senate leaders, noted that the nation’s debt ceiling — the total amount of money the federal government is authorized to borrow to pay for obligations such as ...
The United States debt ceiling is a legislative limit that determines how much debt the Treasury Department may incur. [23] It was introduced in 1917, when Congress voted to give Treasury the right to issue bonds for financing America participating in World War I, [24] rather than issuing them for individual projects, as had been the case in the past.
A debt limit is a cap set by Congress on how much money the U.S. government can borrow. ... that pushed the United States to the brink of default and prompted a first-ever downgrade of its top ...