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Rising government debt levels have seemingly always been in the headlines. In recent years, U.S. debt levels have become political, with one side of the aisle often refusing to raise the debt limit...
The government needs to borrow money to continue paying out what Congress has already approved, but the debt ceiling puts a limit on how much money the U.S. government can borrow to pay its bills.
Government debt is typically measured as the gross debt of the general government sector that is in the form of liabilities that are debt instruments. [2]: 207 A debt instrument is a financial claim that requires payment of interest and/or principal by the debtor to the creditor in the future.
The European debt crisis is a crisis affecting several eurozone countries since the end of 2009. [7] [8] Member states affected by this crisis were unable to repay their government debt or to bail out indebted financial institutions without the assistance of third-parties (namely the International Monetary Fund, European Commission, and the European Central Bank).
The United States debt ceiling is a legislative limit that determines how much debt the Treasury Department may incur. [23] It was introduced in 1917, when Congress voted to give Treasury the right to issue bonds for financing America participating in World War I, [24] rather than issuing them for individual projects, as had been the case in the past.
Because the government spends more money than it collects in tax revenue, lawmakers need to periodically tackle the issue -- a politically difficult task, as many are reluctant to vote for more debt.
The debt ceiling had technically been reached on December 31, 2012, when the Treasury Department commenced "extraordinary measures" to enable the continued financing of the government. [3] [4] The debt ceiling is part of a law (Title 31 of the United States Code, section 3101) created by Congress.
Jeffries said a GOP bill, which later failed, was "part of an effort to shut down the government," unless Congress bent a knee to wealthy Americans and agreed to suspend the debt ceiling for two ...