Infographic: What Is the Debt Limit?

Nov 10, 2021

The debt limit, also known as the debt ceiling, is the maximum amount of money that the U.S. Treasury can borrow. Increasing the debt limit allows the Treasury to borrow funds to pay for government obligations that have already been incurred as the result of laws and budgets approved by the President and the Congress.

Following two years of suspension, the federal debt limit was reset on August 1, 2021, at the level outstanding at that time ($28.4 trillion). After the debt limit was reinstated, the Treasury began to draw down its cash balance and resort to “extraordinary measures” to continue borrowing to finance the deficit. Before breaching the federal borrowing limit, lawmakers on October 14 enacted legislation to increase the debt limit to $28.9 trillion, which is expected to finance government activities through at least early December.

Why is understanding the debt limit important and what are the implications for our economy and our fiscal condition? The infographic below explains. For more details, see our analysis on the debt limit.

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What is the Debt Limit? What is the Debt Ceiling?

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Tweet: Policymakers have come together repeatedly over the years to avoid default by raising the #DebtLimit — no matter which party is in power. via @pgpfoundation

Tweet: The #DebtLimit has been raised frequently in the past — 88 times since the beginning of 1959. via @pgpfoundation

What Does the Debt Mean for Our Future?

We all have a responsibility to build a brighter fiscal and economic future for the next generation.

National Debt Clock

See the latest numbers and learn more about the causes of our high and rising debt.