More than half of the U.S. National Debt is owed to the US public and more than one quarter is owed to foreign entities.
The debt limit, or debt ceiling, is a restriction on how much the federal government can borrow to pay its bills and allocate funds for future investments.
When Congress appropriates or directs government money to be spent, the government is obligated to pay those funds, creating a bill it must pay. The federal government spent 68% more than it collected in fiscal year 2021, resulting in a $2.8 trillion deficit. The deficit decreased from fiscal year 2020 when the federal government spent 91% more than it collected, according to USAFacts.
This bill, also known as the national debt, is the amount of money the federal government has already borrowed to cover outstanding expenses in past fiscal years.
The national debt is composed of debt held by the public in the form of government securities and intragovernmental debt, debt which one part of the federal government owes to another.
The U.S. Gross Domestic Product in December 2022 was $26.13 trillion, according to the Bureau of Economic Analysis. The Gross domestic product (GDP) is the value of all goods and services produced in the US. This number is used to measure the health of the economy by observing when GDP is growing or shrinking.
The U.S. National Debt ceiling is currently set at $31.4 trillion.
In December 2021, Congress increased the debt ceiling to $31.38 trillion.
The debt limit, or debt ceiling, is a restriction on how much the federal government can borrow to pay its bills and allocate funds for future investments. In December 2021, Congress increased the debt ceiling to $31.38 trillion.
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When the national debt exceeds the debt ceiling, the federal government cannot increase its outstanding debt any further. Therefore, the Treasury Department can use extraordinary measures authorized by Congress to manage the federal government’s finances and remain under the debt limit.
These measures can include suspending investments into government saving, retirement, and health plans, halting the sale of Treasury bonds and other government securities, or shifting money between government agencies to pay off intragovernmental debts.
Source: USAFacts.