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Debt Ceiling

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Debt ceiling

Debt Ceiling
The maximum amount that a government can borrow. The term especially applies to municipalities; rising above the debt ceiling may trigger a reduction it a municipality's credit rating. Cities and other local governments that are near the debt limit may issue participation certificates--a right to the receivables for a certain project--instead of direct debt. The United States also has a national debt ceiling, but Congress simply raises it every time the national debt approaches the ceiling.


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The national debt ceiling authorized by Congress is 12.
Although the required legislation may become enmeshed in other current political debates, which will raise uncertainty in the government debt markets and may disrupt some government functioning, we do not believe that the debt ceiling issue will prevent timely service of US federal government debt," according to John Chambers, Chairman of Standard & Poor's sovereign rating committee.
6 percentage points more than 2009, and only a step away from the legal debt ceiling of 40% of average GNP for the previous three years.
 
 
 
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