So I just want to make sure i got this right,

The national debt ceiling was suspended, i.e. the government can now freely spend until Dec.8, which they "say" was for providing $15bn in hurricane relief.

But lets face it, the treasury was running out of "extraordinary measures" to keep the debt below the ceiling, thus the extension. Source -> http://www.businessinsider.sg/us-debt-20-trillion-how-much-2017-9/?r=US&IR=T

The debt increased by 317 billion. But that aside, I want to get into the economics fundamentals. What does this mean for the dollar?

So foreign debt is increased, I am assuming the USD is going to plummet if expectations of quantitative easing to pay off the debt increases?

  • $\begingroup$ How do you know its foreign debt? $\endgroup$
    – Giskard
    Sep 18, 2017 at 17:00
  • $\begingroup$ @denesp I don't actually know the details, but i wish to understand the underlying economic concept of what happens to the exchange rate after debt increases. Would there be a huge difference between domestic and foreign owned debt? The failure to repay it either way seems to suggest quantitative easing, but If so could you phrase it in an answer below? Thanks! $\endgroup$
    – MH.Q
    Sep 18, 2017 at 17:18
  • $\begingroup$ Just for a fun tidbit - thebalance.com/who-owns-the-u-s-national-debt-3306124 $\endgroup$
    – MH.Q
    Sep 18, 2017 at 17:18
  • 1
    $\begingroup$ Just as another point, most countries don't even have a debt ceiling. They spend what they need when they need it and issue bonds to cover it. It's a fabricated problem unique to the US. $\endgroup$ Sep 19, 2017 at 7:54
  • $\begingroup$ The US Government might have defaulted in September. It will now not default until at least December. That should increase short-term confidence to the extent anybody thinks default is a measurable possibility, reducing interest rates by a small amount, though the effect on exchange rates is less clear (higher confidence might increase the value of the US dollar in the short term, but lower interest rates could offset this) $\endgroup$
    – Henry
    Sep 27, 2017 at 7:54

1 Answer 1


Debt is between US govt and The Fed.

If the Fed reset the debt back to 0 and bail out the govt, nothing changes. The next debt epoch starts.

Viscious if my understanding is correct. No other govt in the world has this freewheeling !!


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