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#7 Blog 2023

What’s the Debt Limit, and Why Does It Matter?

May 25, 2023

What’s the Debt Limit, and Why Does It Matter?

Use these lessons to help students make sense of the debt limit, deficit and why they matter to Congress, to the country—and the global impact if the United States can’t pay its bills.


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What is the role of the Federal Reserve in the U.S. economy? Why does it matter what the debt limit is or if we default on our loans—both nationally and on a global scale? What's the "X" date? Your students may know what debt is, but do they know that Congress is the body that sets the restriction on the amount of outstanding debt the U.S. federal government can have at one time?

As defined by, the debt ceiling is “the amount that the Treasury can borrow to pay the bills that have become due and pay for future investments. Once the debt ceiling is reached, the federal government cannot increase the amount of outstanding debt, losing the ability to pay bills and fund programs and services.”

Congress and the president are now in tight negotiations to figure out a way to address these matters as the country comes closer to defaulting on its debts sometime soon, possibly even early June. The last time Congress faced this debate was 12 years ago when the Budget Control Act of 2011 was created.

Use these free lessons with discussion questions, activities and educational videos available on Share My Lesson to engage students in the debate facing Congress and the president on the debt limit.

money flag

Debt Ceiling Fight 

Close Up
Grades 6-12 

Use this brief primer summarizing the current struggle Congress and the president have over raising the debt ceiling. This issue touches on one of the fundamental powers of Congress—setting the budget for the federal government.

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Shai Akabas

Video Clip: Debt Limit and Potential Impact of a Default

C-SPAN Classroom
Grades 7-12, Higher Education

Watch Shai Akabas, economic policy director of the Bipartisan Policy Center, talk about the stalemate over raising the debt limit and the potential impact of a default. He explains that the "X" date is when the federal government would run out of cash on hand to meet all of its obligations. So, what does it mean if the U.S. government can't borrow more money to pay its debt?

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Treasury building

U.S. Treasury Nears Debt Limit

PBS NewsHour Classroom
Grades 6-12   

Earlier this month, the White House renewed its call for Congress to lift the debt ceiling without conditions as the nation could soon default on its debt. Since January, the government has deployed “extraordinary measures” to pay its bills, but time could run out soon, according to the treasury secretary. Use this recent current events lesson to prompt student discussion on the facts.

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Khan academy drawing

Deficit and Debt Ceiling Video Explainer

Kahn Academy
Grades 6-12

What is the difference between the deficit and the debt ceiling? Watch this review video for the basics of the deficit, debt and debt ceiling using graphs and charts.

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Understanding the Debt Ceiling Debate

Council for Economic Education
Grades 9-12

This updated lesson provides an introduction and an overview of the Budget Control Act of 2011. Students will be given information about the legislation and presented with different proposals for dealing with the long-term deficit problem of the U.S.

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Build Background Knowledge

magnifying glass over dollar signs

What Is Monetary Policy? How Money Works

CFR Education
Grades 9-12, Higher Education 

This engaging video and lesson plan can help students learn how central banks—centralized financial institutions of countries or regional organizations such as the European Union—use policy to influence the amount of money in the economy, directly affecting us all. Monetary policy isn’t just a domestic concern. In a globalized world, national economies are connected, and decisions made in one country can have consequences for others. Use this lesson to delve deeper into the topic.

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Federal reserve

A Teacher's Guide to the Recent Bank Failures

CFR Education
Grades 9-12, Higher Education

The health of our economy affects all aspects of everyday life, so it is important for students to understand the basics of the global financial system. With markets on edge and the Federal Reserve’s next steps still uncertain, check out these resources to explain monetary policy.

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Hundred Dollar Bill

Banks, Credit and the Economy

Grades 6-12 

This lesson presents a crash course in the relationship between money, banks and lending in our economy. Students first learn the basics about money and banks. Then they learn about banks’ role as lenders and find out why lending plays such a huge part in our economy. Students learn about the Federal Reserve, inflation and the Fed’s role in regulating our economy. 

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How Did the Constitution Organize the Government?

Center for Civic Education
Grades 9-12

This lesson explains the five major accomplishments of the first Congress. Students learn how the Constitution provides a general framework for the government, including providing money and creating the Treasury Department for taking care of the financial affairs of the federal government.

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For Younger Students

piggy bank

Using Stories to Teach Financial Capability

Consumer Financial Protection Bureau
Grades PreK-8

Prepare younger students for future lessons on the debt limit by developing the key skills necessary to make appropriate personal financial choices. This free, for-credit webinar is a great way to learn about CFPB's Money as You Grow bookshelf and the Money Monsters. Learn how to integrate these storybooks and resources into your classroom to build young people’s financial knowledge, and to help them develop skills, habits and norms that build adult financial well-being.

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Congress and the Legislative Branch

This collection provides resources to help today's students understand: What powers do Congress and state legislatures have? How have those powers been used or changed over time? What issues face Congress today? 

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Susan Youssofi

Susan Goldstein Youssofi, a native of the Washington, DC metro area, has been working on the Share My Lesson team since spring of 2013.


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