Debt-ceiling explainers, explained

We're about to hit the debt ceiling in late February. Again.


Once H.R. 3547, the $1.1 trillion bill to finance the U.S. government through Sept. 30, was approved, debt ceiling increase became the next potential fiscal showdown. (Andrew Harrer/Bloomberg)

There are few good things that come out of an annual celebration of congressional brinkmanship, barring perhaps one: the debt ceiling has been explained to us so many times, by so many sources, that it would be nearly impossible for anyone not to be an expert in our nation's credit habits.

However, the debt ceiling is also confusing and boring. Studies have shown that those well-intentioned citizens who do read a debt-ceiling explainer or two will forget every chart and bullet point within three minutes of closing the tab. Rather than adding another entry to the expansive Google search results for debt-ceiling explainers, below find the collected works of the Internet's chief economic educators.

Who are these people explaining the debt ceiling all the time? If I only want to read one, who is best?

Picking the best debt-ceiling explainer is a very subjective task. Do you like charts? Then you'll probably like to have the debt ceiling explained in one chart. Do you like movies? This one will explain the debt ceiling in 90 seconds. Do you like cheese from Denmark? Then you will probably like the country's lessons on how to do debt ceilings. Here is a list of a few people who can explain the debt ceiling to you in the 21st century:

Which chart used to explain the debt ceiling in one chart works best?

One of the most popular ways to explain the debt ceiling -- or anything on the Internet -- is by putting all the requisite data in a digital trash compactor until it displays in one chart that explains everything.  Like this one, published on Wonkblog in 2011.


What does this chart show? That Republicans have raised the debt limit just as much as Democrats have. As Ezra Klein explained, "At any given time, the minority party likes to pretend that the debt is all the majority party’s fault ... But every president and Congress is paying for the decisions of every previous president and Congress. This is, and always has been, a bipartisan affair."

What a great chart! Still have questions though, like why we need to keep raising the debt ceiling in the first place? Here is one from the Christian Science Monitor.

Christian Science Monitor
Christian Science Monitor

The United States has a lot of nondiscretionary spending they have no choice but to spend every year -- Medicare, Medicaid, Social Security, etc. Our low tax rates and high defense spending in the past decade have made it hard to keep spending on par with revenue. The recession didn't help either.

OK, but what happens if we don't raise the debt ceiling? Here is CNN's worst-case scenario chart -- which is actually just a paragraph with superb feng shui.

Screenshot from CNN
Screenshot from CNN

So, isn't there an easier way to do this? Aren't there any other countries we could emulate? This chart from Quartz has the answer: Denmark!


Image from Quartz

Reporter Ritchie King sums it up:

Denmark is the only democratic country besides the U.S. that has a self-imposed limit on the amount its government can borrow. In its 20-year history, the Danish debt ceiling has only been raised once, in 2010, when the government’s outstanding debt was less than three-quarters of the limit, and there was no risk of bumping up against it. Not only that, but the Danes more than doubled their debt ceiling, just to be safe.

The US, on the other hand, has raised its borrowing limit 15 times since 1993, with the national debt scraping against the ceiling the entire time.

Those two approaches are, as one economist put it, “as different as tangy Danish Blue and bland Philadelphia cream cheese spread.”

I'm tired of reading. Show me a movie.

Lucky for you, there are many videos explaining the debt ceiling. You can learn about the debt ceiling in 60 seconds:

Or 90 seconds. Or three minutes and 49 seconds. Or you can listen to a financial analyst with a great beard explain it to you. Or local newscasters can explain the debt ceiling to you with bad metaphors and man-on-the-street interviews:

I don't want any of these newfangled explainers. Just tell me where I can read a quick-and-dirty guide to why we keep needing to raise the debt ceiling every month.

You're right. Regular old explainers are pretty great! Here are some of the best.

These are all old. Is there anything I need to know about the debt-ceiling crisis happening right now?

Yes! Tomorrow, the debt-limit suspension that Congress legislated post-shutdown ends. The Treasury won't be able to borrow money from the public, and will have to resort to accounting hijinks to keep default at bay for a few weeks. We're set to hit the debt ceiling between February 28 and March 5. Ideally, Congress would raise the limit well before then. But Congress is not an ideal institution. House Republicans originally wanted to tie the debt-ceiling hike to a Keystone XL pipeline provision or to a repeal of an Affordable Care Act provision, but they gave up on that, and are looking for a Plan B. Expect the demands to grow softer as we get closer to Feb. 28 -- no House member wants default on their hands going into an election, especially the Republicans blamed for last fall's government shutdown.

The Treasury also has less wiggle room than it did last year to stave off doom -- debt-ceiling crises have happened so frequently that its last-resort options are slim.

Bottomline: Regardless of whether this latest debt-ceiling standoff ends tragically or just ends, brinkmanship isn't good when it comes to the nation's bills, and can still have longstanding effects on the economy.

Jaime Fuller reports on national politics for "The Fix" and Post Politics. She worked previously as an associate editor at the American Prospect, a political magazine based in Washington, D.C.
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