The debt limit is the maximum amount of money that the U.S. government is authorized to borrow in order to meet its financial obligations, such as paying its bills and servicing its existing debt. The debt limit is set by Congress, and it is currently set at $28.4 trillion.
When the government reaches the debt limit, it cannot borrow any more money unless Congress votes to raise or suspend the limit. This can create a problem because the government still has obligations to meet, but it does not have the money to do so. In the past, when the government has reached the debt limit, it has resorted to a variety of measures to continue meeting its financial obligations, such as delaying payments, prioritizing certain payments, or using extraordinary measures to borrow money.
The debt limit has become a contentious issue in Congress, with some members arguing that raising the limit will allow the government to continue spending beyond its means and increasing the national debt. Others argue that failing to raise the limit could lead to a default on the government’s debt, which could have severe consequences for the U.S. economy and the global financial system.
In recent years, the debate over the debt limit has become increasingly politicized, with some members of Congress using it as a bargaining chip to extract concessions from the opposing party or to push their own policy priorities. This has led to a number of contentious debates and standoffs over the debt limit, which can create uncertainty and instability in financial markets and the broader economy.
Maybe congress should read the Fiscal Investor Financial Plan.