United States debt ceiling facts for kids

The United States debt ceiling is like a spending limit for the U.S. government. Imagine your parents giving you a certain amount of money to spend each month – the debt ceiling is similar, but for the whole country! It's a rule set by Congress (the group of lawmakers who make rules for the country) that says how much money the government can borrow.

Its main goal is to help control how much the country owes, which is called the national debt. It tries to stop the government from borrowing too much money.

Why Was the Debt Ceiling Created?

The debt ceiling was first made a long time ago, in 1917. This was during a time when the U.S. was getting ready to join a very big war called World War I. The government needed a lot of money quickly to pay for the war.

Before 1917, the President decided how much money the government could borrow. But when the debt ceiling was created, it changed this rule. The idea was to make sure that no single person, not even the President, had too much power over how much the country could borrow.

How Does the Debt Ceiling Work?

When the government needs to spend more money than it collects from taxes, it has to borrow. It does this by selling special bonds and other financial tools. The debt ceiling is the total amount of money the government is allowed to borrow and still owe at any given time.

If the government reaches this limit, it can't borrow any more money. This means it might not be able to pay for things it has already promised, like salaries for government workers, payments to soldiers, or money for social programs. To avoid this, Congress usually votes to raise or suspend the debt ceiling when the country gets close to the limit.

The Debt Ceiling Today

The amount of the debt ceiling changes over time. For example, in 2011, the limit was 14.3 trillion dollars. A trillion is a very, very big number – it's a 1 followed by 12 zeros!

The debt ceiling is an important topic because it shows how much the U.S. government owes and how it manages its money. It's a way for Congress to keep an eye on the country's spending.

Images for kids

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  US federal government debt ceiling from 1990 to January 2012 (unadjusted for GDP and population)

See also

In Spanish: Techo de deuda de Estados Unidos para niños