aggregate debt ceiling

The debt ceiling is a legal limit on the total amount of public debt a country can accumulate. It is typically set as an absolute monetary sum.1

The purpose of a debt ceiling is to prevent excessive public debt, which can lead to high interest payments, reduce funds for government programs, and potentially transfer wealth from taxpayers to bondholders. In the United States, the first aggregate debt ceiling was established in 1939. Since the 1960s, the U.S. debt ceiling has been adjusted numerous times to allow the government to continue financing its operations and avoid defaulting on its national debt. Critics argue the debt ceiling is ineffective, while defenders believe it imposes fiscal restraint by forcing political accountability for deficit spending. Raising the debt ceiling does not authorize new spending but allows the government to pay for obligations already incurred.12