Debt ceiling: what is it all about?
This week we’ll be discussing aspects of the US debt ceiling, so in case you’re unfamiliar with the term, here’s a little recap.
The debt ceiling is a a legislative limit on the amount of national debt that the United States government is allowed to borrow. It’s effectively meant to ensure the government doesn’t spend more than it can afford, but it’s 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 has been brought up 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 how much money you can borrow from your credit card, the government also has a limit on how much money it can borrow. Sometimes they raise it because the government needs to borrow more money to pay for things like schools, roads, and the military. This has caused some problems in the past when Congress disagrees — yes, it happens quite often — whether to raise it or not.
Since the modern debt ceiling was first established in 1917. Congress has raised the limit more than 100 times. The frequency of increases varies over time, with some periods seeing multiple increases in a year and others remaining unchanged for several years.
A government shutdown or debt default is what we all want to avoid.
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