The United States hit the debt ceiling on Monday, surpassing $14.3 trillion in debt owed to pay for super important things like the stimulus that was going to keep unemployment from going over 8 percent. It’s totally cool though, because Treasury Secretary Tim Geithner suspended investments in federal retirement funds to buy us a few months to figure out what the heck to do.
Congress has until August 2 to raise the debt ceiling (think of this as a credit card limit — there’s only so much you’re allowed to borrow) or balance the budget.
This has happened numerous times since 1917, when the first limit was set. The idea was a good one: Congress could only borrow so much money before it had to figure out a way to balance the budget and pay back the debt. In theory, it works as a permission slip to borrow and spend, because Congress gets to decide whether or not to increase the limit.
Read the rest at The Stir