Debt ceiling determines how much government can borrow, failure to raise could lead to disaster.

From Yahoo Finance: 2025-01-09 17:56:00

Credit card company raises spending limit to accommodate charges that exceed the original limit, threatening to close account and harm credit history until limit is raised. Government’s debt ceiling similar to credit limit, determines how much money government can borrow to pay for current obligations, not new spending. Failure to raise debt ceiling could lead to economic disaster. US national debt over $36 trillion, debt ceiling used to control federal spending after it’s approved by Congress. Calls to replace debt ceiling process with less traumatic system amid risk of default and economic turmoil. Temporary debt ceiling set at government debt level on Jan. 1, 2025, with continuing resolution to postpone government shutdown, kicking debt ceiling debate to later date. US debt held by investors, Federal Reserve, and foreign countries like Japan, China, and the UK. Managing debt responsibly key to economic stability, borrowing for growth and repayment cycle is essential, says expert.



Read more at Yahoo Finance: What is the U.S. debt ceiling, and how does it impact you?