Federal Borrowing

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August 25, 2024 3 min read Definitions

Crowding Out: Economic Impact of Heavy Federal Borrowing

Economics Finance Crowding Out Federal Borrowing Interest Rates Credit Markets Private Sector

Crowding out refers to heavy federal borrowing at a time when businesses and consumers also want to borrow money, leading to higher interest rates and reduced private sector borrowing.

August 25, 2024 3 min read Definitions

Debt Ceiling: Maximum Amount of Borrowing by the Federal Government

Finance Government Regulations Debt Ceiling Federal Borrowing Congress Fiscal Policy Treasury

The debt ceiling is the maximum amount of money that the federal government is allowed to borrow. When the federal government approaches the ceiling, Congress must raise it in order to authorize additional borrowing and issuance of new debt by the Treasury.