The statutory debt limit often referred to as the debt ceiling, was the limit set by Congress to the amount of debt that the U.S. government can take on. It also includes interest payments on existing debt. Once the government reaches the statutory debt limit, it cannot take on new obligations. The statutory debt limit was a legal limit to the total amount that the U.S. Treasury was authorized to borrow on behalf of the taxpayers. The first statutory debt limit was enacted in 1939, effectively transferring the power to borrow on public credit, from Congress to the Treasury.1 The statutory debt limit places a nominal constraint on the Treasury’s authority to go into debt, though Congress has routinely raised the limit over the years to accommodate growth spending and budget deficits.Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.

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