What Happens If The U.S. Can’t Pay Its Debt?

The recent debt ceiling standoff gave a glimpse into how catastrophic a federal default would be for the U.S. economy. While a bipartisan agreement is the easiest solution to the crisis, there are other possible solutions to breaking the standoff, including a $1 trillion coin that has gained traction in recent years. So what exactly would happen if the U.S. government fails to raise the debt ceiling, and can a $1 trillion coin really put a stop to the crisis? Despite the short-term deal struck between the Republicans and the Democrats in early October, the debt ceiling crisis is far from over. Congress needs to decide by Dec. 3 if the U.S. government will raise the debt ceiling or default on its loans. But there are other possible solutions besides bipartisan agreement. The debt ceiling can also be raised by a process known as budget reconciliation. First introduced in 1974, this process can expedite the passage of certain tax, spending and debt-limit legislation. What would oth