The federal debt ceiling 101

The debt ceiling is a legal cap on how much money the US government can borrow

Set by Congress, the debt ceiling limits total federal borrowing. This guide explains why the cap was created, how it has evolved, and why raising or suspending it has become a recurring political flash point.

The debt ceiling is the threshold Congress sets for federal borrowing

If the US reaches this limit and Congress doesn’t pass a bill to raise it, the government cannot repay its debts. Suddenly, investors would lose assurance that the Treasury would make good on its securities, which have long been considered the safest type of investment.

The US is one of two countries that abide by a predetermined borrowing limit

When the Treasury hits this “debt ceiling,” Congress has to pass a bill increasing the borrowing threshold. Failure to do so may lead to a financial crisis.

When the US hits the debt ceiling, the Treasury uses emergency measures to avoid default

After the US reached its debt ceiling in January 2023, the Treasury deployed "extraordinary measures" to keep paying obligations. This article explains the steps, how they work, and why they last only for a limited time. (Some readers may experience a paywall.)

What happens if the US doesn't pay its debt?

A video created during the debt ceiling debates of 2021 outlining what would happen if the US failed to meet its debt obligations. Its lessons are applicable to today's debates.

The national debt is the total amount the US government owes its creditors

This US Treasury page explains what the national debt is, how it accumulates from annual deficits, and why rising debt can affect interest costs, fiscal flexibility, and long-term economic stability.

Key moments that shaped the national debt include the Civil War, both World Wars, the 2008 recession, and the COVID-19 pandemic

The US national debt has grown alongside wars, recessions, and policy shifts—from $75M after the Revolutionary War to over $34T today. This visual timeline walks through key moments that shaped the debt.

The federal deficit is the gap between what the US spends and what it collects

This US Treasury page explains how the federal deficit occurs when annual spending exceeds revenue, shows the current fiscal-year shortfall, and tracks how deficits rise and fall with economic conditions and policy choices.

How much the federal government pays in interest on the debt

A significant portion of annual funding goes to servicing the federal government's public debt, which stood at $36T in 2025. That amount required roughly $1T in interest payments just for the year.

Government shutdowns, 101

Roughly a quarter of the US federal government's spending must be approved annually through a set of 12 appropriations bills in Congress. When they aren't, a government shutdown ensues, where federal agencies are legally barred from spending any further money on nonessentials. This explainer covers the basics of government shutdowns and their impact on the broader culture.

Why Ray Dalio thinks the US deficit is a political problem

Dalio frequently argues that debt cycles are inevitable and a tradition of every empire. However, he said in 2025 that the US was headed for a debt crisis. Dalio says that while Republicans and Democrats agree on the math of the debt crisis, all politicians make promises to neither increase taxes nor cut government benefits—which Dalio says can't close the deficit.

The Constitution gives Congress sweeping control over the federal budget

Article I, Section 8's Spending Clause authorizes Congress to tax, pay debts, and promote the "common Defence and general Welfare," making it one of Congress's most powerful tools—and the constitutional foundation of federal budget control.

Tax policy can have a direct impact on the national debt

Past presidents' changes to tax codes have inflated the deficit. An expert on the topic explains the interplay between policy and the national budget while debunking 10 tax-related myths in this podcast.

The trillion-dollar coin is a proposed platinum coin with a face value of $1T, which could be used to reduce the national debt

This conceptual strategy was first proposed in 2011 as a potential alternative to raising the US debt ceiling. Although there were several high-profile proponents of the idea, it was eventually rejected in 2013 by Treasury Department and Federal Reserve officials.

Many local governments also struggle to rein in their spending

The federal government isn’t the only one that holds debt. State and local governments borrow money to cover budget gaps, too.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

The Federal Reserve is the central bank of the US

No institution wields more power in US finance than the Federal Reserve—but opinion polls indicate that most Americans don't know what it does. Curious about the country's central bank? 1440's got your breakdown of how the Federal Reserve works.

Modern Monetary Theory 101

Modern Monetary Theory is a macroeconomic theory that says government spending should not be restrained by fears of rising debt. Here's a breakdown of how the theory works.

The federal budget process begins nearly a year before funds are spent

Creating the federal budget starts months in advance. This resource explains each stage, showing how the president proposes priorities, Congress reshapes and approves funding, and federal agencies implement the final budget.

Student debt has a widespread economic impact

Student debt is no different than the big rent or car payment that comes out of someone’s paycheck every month: Its presence affects that household’s purchasing power. Multiply that household by the 43 million Americans who had outstanding federal loan debt in September 2023, and student debt’s impact becomes considerable.

Term limits for Congress face a steep constitutional hurdle

Although polls show overwhelming support for congressional term limits, this would require a constitutional amendment. Since 1995, the Supreme Court has barred states from imposing their own limits, leaving only the difficult Article V amendment process as a path forward.

How to get out of debt

This article provides a few helpful tips for getting out of debt, such as learning more about the debt itself and asking for better interest rates. It also explains the popular "debt snowball" and "debt avalanche" methods for getting out of debt. Curious to learn more? Read the full article here.

The history of bankruptcy in the US dates back to the signing of the Constitution

In 1787, this founding document gave Congress the right to establish nationwide bankruptcy laws. Legislators took advantage of that power in 1800 when they passed the Bankruptcy Act of 1800, the first comprehensive bankruptcy law at the federal level.

Since its inception in 1938, Congress has raised the federal minimum wage 22 times

If you want all the details about when and why these rate increases happened check out this resource from the US Department of Labor.

See how the federal estate tax has changed in the 21st century

In 2001, the government passed an act to completely repeal the tax. It was overturned in 2010. In 2017, the government increased the exemption threshold so fewer people would have to pay into the tax. In 2025, the exemption threshold was permanently set to $15M.

Credit limits can be lowered as well as increased

Some common reasons for someone's credit limit being lowered include missed payments, an inactive account, and more.

Despite being favored by 87% of Americans, Congress does not have term limits.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

The US dollar is the most widely circulated currency in the world, and is involved in nearly 90% of global transactions

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Before the current East Wing ballroom project, only two White House renovations in the past 100 years cost more than $10M.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Discover the catastrophic consequences of a failure of the US electrical grid—something that is more likely than many Americans think.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

The United States has had a tumultuous relationship with Cuba since its 1959 revolution, highlighted by a nuclear crisis and a decades-long trade embargo.

A century of Billboard issues documenting the evolution of popular music.

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

While the sun's gravity keeps the planets in orbit, their gravity also pulls on the sun, causing it and everything else in the solar system to orbit around a mutual balance point called the barycenter—the true center of the solar system.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.

Bone marrow (soft tissue found inside certain bones) generates roughly 500 billion new blood cells each day

In 2009, the nation was gripped by the story of a missing young boy who was believed to be floating over Colorado in a homemade balloon, until it was revealed that he was at home the whole time.

Take a 3D tour of the Hajj, Islam's annual pilgrimage to Mecca, undertaken by over 1.5 million Muslims.

Dirty lightning is a thunderstorm created from friction between rising and falling flows of ash and smoke during volcanic eruptions.