Debt Ceiling

Filed Under » , , ,
Dictionary Says

Definition of 'Debt Ceiling'

The maximum amount of monies the United States can borrow. The debt ceiling was created under the Second Liberty Bond Act of 1917, putting a "ceiling" on the amount of bonds the United States can issue. As of the end of July, 2011 the debt ceiling was set at $14.3 trillion.

Also known as the "debt limit" or "statutory debt limit."

Investopedia Says

Investopedia explains 'Debt Ceiling'

Before the debt ceiling was created, the President had free reign on the country's finances. In 1917, the debt ceiling was created during World War I to hold the President fiscally responsible. Over time, the debt ceiling has been raised whenever the United States comes close to hitting the limit. By hitting the limit and missing an interest payment to bondholders, the United States would be in default, lowering its credit rating and increasing the cost of its debt.

There has been controversy over whether the debt ceiling is constitutional. According to the 14th Amendment of the Constitution, "The validity of the public debt of the United States, authorized by law ... shall not be questioned." The majority of democratic countries do not have a debt ceiling, with the United States being one of the exceptions.

Video Definition

Related Definitions

Search results for

'Debt Ceiling'

  • Understanding The Debt Ceiling

    http://www.investopedia.com/video/play/what-is-the-debt-ceiling
    What does it mean when the US government raises the debt ceiling? What purpose ...
    Videos /. Understanding The Debt Ceiling. Next video ...

  • Should Congress Raise The Debt Ceiling? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0611/Should-Congress-Raise-The-Debt-Ceiling.aspx
    ... Should Congress Raise The Debt Ceiling? ... TUTORIAL: Economic Indicators. The government
    raises its debt ceiling often, doing so 74 times in the previous 49 years. ...

  • The Week Ahead: For Stocks, The Debt Ceiling's the Limit

    http://stocks.investopedia.com/stock-analysis/moneyshow/TheWeekAheadForStocksTheDebtCeilingstheLimit.aspx
    The markets would probably be much more bullish if not for the debt-ceiling debate
    in Washington, and in fact last week's rally will need to last into an early ...

  • How To Defuse The Debt Bomb - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/How-To-Defuse-The-Debt-Bomb.aspx
    ... The Treasury Department has warned it will run out of money to cover the country's
    bills if Congress does not raise the $14.3-trillion debt ceiling by August 2 ...

  • The Most Effective Way To Eliminate Debt

    http://www.investopedia.com/video/play/The-Most-Effective-Way-To-Eliminate-Debt
    ... Read More »; Understanding The Debt Ceiling. What does it mean when the US
    government raises the debt ceiling? What purpose does ... ...

  • Steps To Getting Out Of Debt

    http://www.investopedia.com/video/play/how-to-get-out-of-debt
    ... Read More »; Understanding The Debt Ceiling. What does it mean when the US
    government raises the debt ceiling? What purpose does ... ...

  • The Most Effective Way To Eliminate Debt

    http://www.investopedia.com/video/play/the-most-effective-way-to-eliminate-debt
    ... Read More »; Understanding The Debt Ceiling. What does it mean when the US
    government raises the debt ceiling? What purpose does ... ...

  • Potential Consequences Had The US Defaulted - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/Potential-Consequences-Had-The-U.S.-Defaulted.aspx
    ... the US government dodged a disastrous default on its debts, as the House and Senate
    passed an emergency bill to raise the country's debt ceiling and President ...

  • The Italian Crisis - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/The-Italian-Crisis.aspx
    ... As of August 8, the US stock market is down 9% making it one of the most violent
    declines in history and although the debt ceiling debate was largely blamed at ...

  • Microeconomics Vs. Macroeconomics

    http://www.investopedia.com/video/play/macro-versus-microeconomics
    ... Macroeconomics. Next video: Understanding The Debt Ceiling. Economics is divided
    into two broad categories: micro and macro. ... Understanding The Debt Ceiling. ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links