Why does the United States enforce the legal limit on how much money the federal

Question

Why does the United States enforce the legal limit on how much money the federal government can borrow? 2. The article says that everything in the economy is intricately intertwined. Can you think of other examples of how an increase in interest rates may affect your household? 3. The U.S. Federal Reserve is independent from the government. Do you think this independence exacerbates or helps to mitigate the budgetary problems of the federal government? 4. Is there any risk of printing lots of dollars to help finance the federal debt? Explain. To complete this assignment, check the following box. I have read the discussion questions on this page and am finished with this analysis.

Explanation / Answer

Multiple questions asked. First question is answered below.

US has enforced legal limits on the amount of money that can be borrowed by the Fed because it doesn't want to give unnecessary freedom to the Fed regarding loans. If not monitored, Fed would start borrowing money from time to time without taking the required steps. More loans would doubly affect the US economy. Not only will the interest to paid would start piling up, incrrased money supply would lead to inflation.

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