WMDT 47 NEWS - Come October 17th, the Treasury will no longer be able to borrow money unless Congress raises the debt ceiling.
The debt ceiling is the limit beyond which our government can not borrow and it's an amount that is mandated by Congress.
"Nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years," said President Barack Obama in his speech on Tuesday. "This is the credit worthiness of the United States we are talking about. This is our word.
"This is our good name. This is real, and the government shutdown millions of Americans face inconvenience or outright hardship."
President Obama said in such a case, every American could see 401Ks and home values fall and student loans rise.
"There would be a significant risk of a very deep recession at a time we are still climbing our way out of the worst recession in our lifetimes," said Obama.
WMDT spoke with Leonard Arvi, an assistant professor of finance at Salisbury University about the possible consequences for not raising the debt ceiling.
"If the government elects not to pay, those people who hold the US debt, those people who have US bonds, then it would amount to a default which would be catastrophic to the US economy and the world economy," said Arvi.
If nothing is done, the Treasury said on November 1st, the federal government will have run out of all its cash-on-hand.