Posted 5/16/2011 11:39:00 PM by Douglas

For a line of credit increase, press one.

The United States reached its $14.3 trillion limit on federal borrowing Monday, leaving Congress 11 weeks to raise the threshold or risk a financial panic or another recession.

If it doesn't raise the limit, Congress would have to come up with $738 billion to make up for what it planned to borrow through the end of the fiscal year on Sept. 30. The options are drastic: Cut 40 percent of the budget through September, which might mean defaulting on payments to investors in government bonds; raise taxes immediately; or some combination of the two.

Wow, I never get tired of this story. Thankfully, it doesn't seem like I'll have to, since this happens just about every year. I finally made a tag for it! The details:

In 2010, Congress raised the limit to nearly $14.3 trillion from $12.4 trillion. Three decades ago, the national debt was $908 billion. But Washington spent more than it took in, and the debt rose steadily — surpassing $1 trillion in 1982, then $5 trillion in 1996. It reached $10 trillion in 2008 as the financial crisis and recession dried up tax revenue and as the government spent more on unemployment benefits and other programs.

Sleep tight, kids.

Labels: debt ceiling