In most years the federal government brings in less revenue than it spends. To cover this difference, the Treasury Department has to issue government bonds which increases the national debt. The debt limit is legislative restriction on the total amount of national debt the Treasury is authorized to borrow to meet its existing legal obligations.
What is the current debt limit?
The current statutory limit on total debt issued by the Treasury is just under $16.7 trillion.
Shouldn’t we want Congress to refuses to raise the debt ceiling since it will lower our national debt?
The debt ceiling does not lower the national debt. The legal obligation to pay the debt has already been incurred by the government so the money is already owed. Refusing to raise the debt ceiling merely prevents the Treasury Department from borrowing money to pay the government’s bills.
When will the government run out of money to pay its bills?
The current estimate is October 17, 2013.
What happens when the government doesn’t have money to pay its bills?