By Dr. James M. Dahle, WCI Founder
We have been getting a lot of questions about the debt limit crisis in Washington and how it affects investments such as Treasury bonds, the TSP G Fund, and savings bonds like I bonds. I’m kind of surprised how many we’re getting (you’ll soon see why), but Josh, our content director, says I have to write a post about it. So, here’s what to know about the debt limits and how they could affect your investments.
Why Is There a Debt Limit?
The first thing you need to understand is that this “debt limit” thing is completely artificial, and it could be changed by Congress at any time. In 1917, Congress passed the Second Liberty Bond Act to help finance World War I. As part of that act, a “debt ceiling” was put in place. This rule basically said, “The US government can only borrow this much money.” That number wasn’t indexed to inflation or anything, and it has periodically been raised by acts of Congress. In fact, during the last 106…
This article was written by The White Coat Investor and originally published on www.whitecoatinvestor.com