What Does Raising The Debt Ceiling Mean

Why the debt ceiling matters.

What does raising the debt ceiling mean. The debt ceiling is an aggregate figure that applies to the gross debt which includes debt in the hands of the public and in intra government accounts. In the current deal the debt ceiling would be suspended for two years. In order to spend past this ceiling congress must agree to raise it.

If you look at the debt ceiling history you ll see that congress usually thinks nothing of raising it. Whenever the government is going to exceed a debt limit meaning it needs more funding for current debt congress has to vote its approval to raise it. About 0 5 of debt is not covered by the ceiling.

The debt limit ceiling does not affect spending per se but the ability of the government to pay debts which have been legally contracted. During the last 10 years congress increased the debt ceiling 10 times. It raised it four times in 2008 and 2009 alone.

The purpose of this post is not to be political but to explain the facts around the debt. In short raising the debt ceiling gives the u s. The debt ceiling was raised again in 2014 2015 and early 2017.

A debt ceiling is the maximum amount of debt that a government can take on. Debt exceeding 20 trillion for the first time president trump signed a bill extending the debt ceiling. That means the government can borrow as much as it needs in order to pay off its.

For a simple example if we chose not to raise the debt limit it would be like running up your electric bill and refusing to pay the bill. Voting to raise the national debt limit is a redundant process as the proposed spending and costs of government have been previously passed by majority votes in both houses. By law the nation can not exceed its debt ceiling.