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On the Mark: Dooming Debt or Déjà Vu?

February 15, 2023

What is The Debt Ceiling?

On January 19, the US government reached its legal $31.4
trillion (T) debt limit1
. The debt ceiling is about paying the
bill on purchases already made, just like paying your credit
card bill. The difference, however, is when individuals
reach their credit limit, they can no longer make new
purchases on that credit card. In the case of Congress,
when it reaches the debt ceiling or its credit limit, it can
continue to spend. That is because Congress is not bound
by the debt ceiling; instead, the Treasury department,
which is responsible for the financing of or paying the
government’s bills, is bound by the debt ceiling. In short,
the debt ceiling is often confused as a vehicle to control
future spending, which it is not. Instead, it’s simply the way
to pay our past-due bills.

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