Definition of Statutory Debt Limit
What is the definition of the term "statutory debt limit"? What does the term "statutory debt limit" mean?
The "statutory debt limit" is commonly referred to as the "debt ceiling".
The "statutory debt limit" is basically in place in the United States in order to force legislators to continuously examine the spending practices of the country.
The "statutory debt limit", or "debt ceiling", is set at a certain amount by Congress. For instance, the statutory debt limit in the country is currently set at $14.294 trillion. If the United States plans on owing more money than that, then legislators need to agree to raise the debt limit in the country.
The "statutory debt limit" was first introduced in the Second Liberty Bond Act of 1917. This Act allowed Congress to enact "aggregate constraints on certificates of indebtedness and on bonds that allowed the Treasury greater ability to respond to changing conditions and more flexibility in financial management."
Separate limits were set on each category of debt at the time. In 1939, these separate limits were eliminated, which ended up creating a total aggregate limit which "covered nearly all public debt".
The statutory debt limit has been raised often since it was first introduced. As a matter of fact, the statutory debt limit has been altered over 70 times since 1962.
When legislators discuss the topic of raising the statutory debt limit in the country, they must always confront the following questions:
-are we spending too much?
-do we owe too much?
The statutory debt limit is a hot button issue in the country, and many politicians will seize on this and demand harsh spending cuts in order to agree to an increase in the debt ceiling. When it comes right down to it though, both parties have liberally raised the nation's debt ceiling during their time in power over the past 50 years, and the trend will likely continue for the foreseeable future. It wasn't that long ago when Democrats were blasting Republicans over the debt ceiling, and now the situation has been reversed.
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History of the Debt Limit Since 1940