2011 U.S. Debt Ceiling Crisis

Filed Under:
Dictionary Says

Definition of '2011 U.S. Debt Ceiling Crisis'


A contentious July 2011 debate regarding the maximum amount of borrowing that the United States government should be allowed to undertake. A debt ceiling has been in place since 1917, but the government raises it whenever it comes close to hitting it. Hitting the debt ceiling would mean defaulting on interest payments to creditors. The consequences of such a default could include late, partial or missed payments to federal pensioners, Social Security and Medicare recipients, government employees and government contractors, as well as an increase in interest rate at which the U.S. could undertake further borrowing. The 2011 U.S. debt ceiling crisis was a heated negotiation over how to avoid potential problems like these.
Investopedia Says

Investopedia explains '2011 U.S. Debt Ceiling Crisis'


Congress resolved the debt ceiling crisis when it passed the Budget Control Act of 2011 and decided to immediately raise the debt ceiling by $400 billion, from $14.3 trillion to $14.7 trillion, with the option for additional increases in the coming months. The agreement included $900 billion in spending cuts over the next 10 years and established a special committee to identify additional spending cuts. In the aftermath of the crisis, Standard and Poor's downgraded the United States' credit rating from AAA to AA+ even though the U.S. did not default.
comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center