US Debt Crisis

OWE money, pay money.

The writing is on the wall for the US and the European Union.

And some analysts are saying that the debt problems hurting two of Singapore's trading partners have had an effect on our economy. (Singapore's GDP grew by 0.5 per cent on a year-on-year basis in the second quarter, down from the 9.3 per cent growth in the previous quarter.)

So what's the big deal about the "US debt ceiling" and the "Greek debt crisis" and how does it affect us?

What does the US mean by a debt ceiling?

It is a limit on the amount the US government can borrow.

The debt ceiling has been raised repeatedly and lowered a few time since then.

The US Congress often balks at raising the limit, and the confrontations are always worse when control of the government is divided between the two parties (the Republicans and President Barack Obama's Democratic Party).

The limit currently stands at US$14.3 trillion(S$17.5 trillion), a ceiling that the government reached in May, reported the Los Angeles Times.