Decoding the US National Debt: Exploring the Debt Ceiling, Last Raise, Consequences of Default and More

The United States reached its debt limit, also known as the “debt ceiling,” on January 19, 2023, leading the Treasury Department to use “extraordinary measures” to pay bills, as reported by CNBC on January 19, 2023. People had questions about the debt ceiling, including when it was last raised and how the national debt is calculated. Here are five verified answers to those questions:

What is the national debt?

The US national debt is $31.5 trillion and is the result of the federal government borrowing to pay expenses and budget deficits over time.

What is the debt ceiling?

The debt ceiling is a $31.4 trillion limit set by Congress on the amount the federal government can borrow. It only affects existing obligations and does not authorize new spending or cost taxpayers.

When was the debt ceiling last raised?

The debt ceiling was last raised in December 2021 by $2.5 trillion to its current limit of approximately $31.4 trillion.

What happens when the U.S. hits the debt ceiling?

The U.S. hitting the debt ceiling does not automatically result in default, but the Treasury can no longer borrow more money. The Treasury can use “extraordinary measures” to continue paying government bills.

What could happen if Congress does not raise the debt ceiling on time?

If Congress fails to raise the debt ceiling and the Treasury runs out of cash, the government may default on its obligations and cause financial harm globally, increase borrowing costs, and lead to a decline in the stock market and job losses.

The presented information is based on a report by Verify dated January 25, 2023.