There Has Been a Flurry of Debt Limit Increases Over the Past Decade
Eyebrows (and the blood pressure readings of many) were raised recently when the Democrats proposed raising the debt limit by $1.9 trillion dollars to $14.3 trillion dollars.
By definition, a debt limit is the maximum amount of money that a governmental entity can borrow.
If you want to borrow more than the debt limit, then you need to raise the limit first. Legislators need to approve any increase in the debt limit.
The debt limit was most recently increased to $12.394 trillion dollars on December 24th, 2009.
Anyways, from 1940 until present day, the federal debt limit has been increased over 50 times.
The first increase during that time came on June 25th, 1940, when the limit was increased to $49 billion dollars.
The United States soon entered World War II, and the federal debt limit quickly skyrocketed. On April 3rd, 1945, Congress approved a new federal debt limit of $300 billion dollars, a marked increase from just a few years earlier. War is expensive.
The US government didn't need to increase the debt limit to more than $300 billion dollars until July of 1962, as the country was able to produce seven budget surpluses between the end of WW II and 1962.
In February of 1975, the US government approved a federal debt limit of over $500 billion dollars for the very first time.
In September of 1981, the US government approved a federal debt limit of over a trillion dollars for the very first time. Shortly after, the US federal debt clock ticked past $1 trillion dollars.
By 1985, the federal debt limit was up to $2 trillion dollars. By 1989, legislators were approving a debt limit of over $3 trillion dollars.
You get the idea - the federal debt limit has skyrocketed over the past 50 years or so.
As you are almost certainly aware, the federal debt load of the United States has really started to accelerate over the past couple of decades.
A couple of expensive wars and a near-collapse of the financial system have helped to bring the US national debt load to over $12 trillion dollars. Soon, this figure will be close to $15 trillion dollars.
In March of 1996, the federal debt limit was increased to over $5 trillion dollars for the very first time.
Less than 14 years later and we are talking about a debt limit of over $14 trillion dollars.
That is an unbelievable (and scary) increase that impacts every single person in the United States today, as well as many future generations.
Since 1996, I count a total of 11 debt limit increases, not including the newest proposed increase to over $14 trillion dollars.
These debt limit increases are becoming increasingly unpopular. Nobody was really talking about them a year or two ago, but now they are becoming a political hot potato. It's clear that more and more people are becoming worried about the nation's massive debt load.
I wonder how many more debt limit increases we will see over the next 10-20 years?
Source: Debt Limit Definition
Filed under: The Economic Meltdown