Trump Says Debt Limit Should be ‘Entirely Scrapped to Prevent an Economic Catastrophe’

Since 1960, Congress has adjusted the debt limit 78 separate times, providing the U.S. government with more flexibility in borrowing money in order to meet its obligations. In a new Truth Social post, President Trump has called for the debt limit to be “entirely scrapped to prevent an Economic catastrophe.”

The post included a screenshot of a tweet from U.S. Senator Elizabeth Warren that said she agreed with scrapping the debt limit. Warren added that she disagrees with increasing the debt limit by $4 trillion to “fund more tax breaks for billionaires,” a reference to Trump’s megabill.

Stock Market Would be Impacted by U.S. Debt Default

Both Trump and Warren seek to increase the debt limit in order to lower the risk of the government defaulting on its debt. A default would cause widespread panic within the U.S. economic system, which would likely lead to a sharp selloff in stocks as investors flee to safer assets.

In addition, it’s a common practice for large corporations, like Apple (AAPL) and Microsoft (MSFT), to hold U.S. debt. That means that a default would have direct implications for these trillion dollar companies that are heavily weighted in benchmark indices.

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