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.