Definition of Debt Ceiling



Debt ceiling is the maximum borrowing limit for United States government. The purpose of debt ceiling is to restrict the United States borrowings from public by issuing bonds or over-borrowing and hence to control the debt burden on the United States government.

 


In situations of high spending by the government when there are chances that the debt ceiling will be reached and might get crossed, in which case the government has to look for other sources to fund this spending to bring the debt level below the ceiling. However, the government can increase the debt ceiling limit on presidential instructions. 


View More Corporate Finance Definitions