Debt ceiling: what is it?

Throughout this week we will be discussing aspects of the US debt ceiling, so in case you are not familiar with the term, here is a little summary.

The debt ceiling is a Legislative limit on the amount of the national debt that the United States government is authorized to borrow. Indeed, it is intended to ensure that the government does not spend more than it can afford, but it has been a source of political controversy in recent years as lawmakers debate whether or not to raise the limit.

The debt ceiling does not limit the amount of money the government can spend, but rather the amount it can borrow to finance that spending. The United States Congress has the power to raise or lower the debt ceilingand it has been raised many times in the past.

You could say it’s like a credit card limit for the government. Just as you have a limit on the amount of money you can borrow with your credit card, the government also has a limit on the amount of money you can borrow. Sometimes they increase it because the government needs to borrow more money to pay for things like schools, roads, and the military. It has caused some problems in the past when Congress disagrees, yes, that happens a lot, on whether or not to raise it.

Since the modern debt ceiling was first set in 1917, Congress has increased the limit more than 100 times. The frequency of increases has varied over time, with some periods with multiple increases in a single year and others going several years without any change.

A government shutdown or debt defaults is what we all want to avoid.

By admin

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