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Note: A version of this episode first ran in 2023.
Every year, the U.S. government spends more money than it takes in. In order to fund all that spending, the country takes on debt. Congress has the power to limit how much debt the U.S. takes on. Once we reach that limit, Congress has a few options so that the government keeps paying its bills: Raise the debt limit, suspend it, or eliminate it entirely.
Which is daunting, because if lawmakers don't figure something out in time, the ramifications for the global economy could be huge.
Shai Akabas, of the Bipartisan Policy Center, has become something of the go-to expert in calculating the exact date America would hit the wall and not be able to pay all its debts. This day is so terrifying it has a special name, the X-Date.
Today's episode is about how Akabas and Jay Powell — long before he became chair of the Federal Reserve — worked to create a system to determine the X-Date with the hope of helping us all never reach it.
We also have an update on this year's looming X-Date, which could arrive as soon as this summer.
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The Federal Reserve on Wednesday released its decision on interest rates following its two-day meeting this week.
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FOMC officials expect the core personal consumption expenditures price index, which excludes food and energy, to increase at a 3.1% rate in 2025.
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The Federal Reserve is expected to hold interest rates steady Wednesday. Members of the central bank's rate-setting committee will telegraph their plans for possible rate cuts later this year.
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