Economics
Government’s Debt Ceiling, Defined
What is the Debt Ceiling Limit? The debt ceiling is a limit imposed by Congress on how much debt the federal government can carry at any given time. When the debt ceiling is reached, the US Treasury cannot issue anymore treasury bills, bonds or notes. It can only pay bills as it receives tax revenues. In other words, each time the debt ceiling is increased, it essentially allows the federal government to pay bills above its means. Average Citizen Comparison We can compare this practice to a personal credit card issued by a bank in your name. At issue, you were given a credit limit of $3,000.00 with an interest rate of 21% per year. […]