by Bruce Tyson

Created on: April 06, 2011

Federal Government borrowing could come to a screeching halt unless Congress authorizes it to surpass its current $14.6 trillion debt limit. Because the government does not have enough revenue to pay for the expenses Congress has authorized, many believe that Congress must raise the debt ceiling as a measure to stave off insolvency. Others, however, believe that the government has racked up enough debt and that the time is now to tell Congress “No!”

About the national debt

For more than 100 years, the Republic operated cautiously regarding federal debt. Every time the government wanted to borrow money, it had to ask Congress for authorization. Beginning in 1917, however, the requests for deficit spending became unmanageable, so Congress set a borrowing limit which set the maximum amount of borrowing allowed. This was more a time saving initiative than anything else as Congress and the American public slowly became acclimated to the idea of spending more than the government’s net receipts.

1.The debt ceiling had humble beginnings

A lot has changed since the first borrowing cap of $11.5 billion; a handsome sum in 1917, but now is so miniscule that the government could lose it and not even notice that it was gone.

The nation has come a long way and has seemingly lost its moral compass as it abandoned the founding fathers vision of a small, limited and inexpensive federal government. Politicians now measure debt in trillions and most of the people seem to have no idea exactly how much money $1 trillion really is.

2.The debt ceiling represents a lot of money

Some Americans have suggested that politicians use the “trillion” dollar designation loosely because a few trillion seems to sound better than past talk of hundreds of billions. In fact, it seems like many people do not realize how much money $1 trillion is.  It is one thousand billion dollars. It is one million million dollars.

Time says that one trillion dollar bills will go more than one-quarter of the way to the moon. The moon is about 238,855 miles away from the earth. One quarter of that is 59,713 miles high. That’s a lot of money.

Now consider that the national debt ceiling right now is a staggering 14.6 times that amount and the nation would need almost four stacks of $1 bills that went from earth to the moon to pay it all off.

3.The national debt costs interest

The national debt costs money to maintain. According to the Treasury Department the interest payments for fiscal year 2011 have already surpassed $191 billion! That is a lot of money too.

4.Why is the debt ceiling necessary?

Politicians want to create the illusion that they are concerned about government indebtedness, so it sets a ceiling to assure themselves and their constituents that the government will never spend more than a certain amount. Unfortunately, Congress has never refused to increase the US debt ceiling, so setting the limit is just a meaningless routine.

5.Should Congress raise the debt ceiling?

Congress has decided to spend more money than the government receives, so it appears morally obligated to allow the government to borrow more money. However, more Americans seem to be upset with unfettered government spending and are clamoring for Congress to slash spending rather than increase borrowing.

Congress is likely to raise the national debt limit soon, but the increase will likely be coupled with spending cuts that will help avert a fiscal crisis.

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