Articles from Theodore Cangero
The Bipartisan Budget Act of 2015 suspended the debt ceiling through mid-March of this year. On March 16, the debt ceiling was raised to the current level. When the debt ceiling is reached, the Treasury will not be able to issue more debt to borrow new funds from the public. Instead, the Treasury must take extraordinary measures to raise cash. Extraordinary measures are policies that temporarily lower the national debt by reducing the Treasury securities held by government agencies—known as intragovernmental debt.
Ongoing federal budget deficits have required the U.S. Treasury to issue substantial amounts of debt to finance government spending. The Treasury has been able to easily issue debt since the federal government enjoys the highest credit rating, which lowers the interest rate that creditors demand. Historically low interest rates in general have further helped limit interest expense.
At the height of the housing bubble in 2005, both existing and new home sales reached all-time highs—7 million for existing home sales for the year and nearly 1.4 million for new home sales. To put the housing bubble in perspective, new home sales increased three-fold from their low in 1991 to their high in 2005. Home prices as measured by the Standard & Poor’s Case-Shiller Home Price Index rose more that 200 percent between the mid-1990s and the height of the housing bubble.