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June 1st, 2011
10:07 AM ET

What the debt ceiling is and why it matters

By Michael Milhaven, Producer, CNN American Morning

If your eyes glaze over when you hear the words "debt ceiling," you're not alone. It's a concept that typically only economists and heads of state need worry about. But if you want to understand the current political debate and why both parties are fighting so hard to limit or raise the debt ceiling, read on.

Let's break this down for everyone in easier terms - what is the debt ceiling is and what it means for you?

Think of it as America's credit limit. The country only has so much it can spend to pay its bills and interest payments. If you have a credit card, you know there's only so much that you're allowed to put on that card.

The debt ceiling is that credit card limit for the U.S. government.

Right now, our "credit card limit" is at $14,293,975,000,000 (yes, that reads $14 TRILLION).

That's a lot of dough. Stacked on top of each other, $14 trillion dollars would go from Earth to the Moon and back...more than four times. Or, at $500 a pop, you could by 28 billion iPad 2's. Also, consider the estimated cost of rebuilding Joplin, Missouri after the devastating tornado damage. That price tag is around $3 billion. If we had $14 trillion towards rebuilding, we could rebuild the town 4,700 times.

To find out more about the debt ceiling, watch Christine Romans explain it in the video below. For more information and complete coverage of the debt ceiling debate, check out

Filed under: Debt • Debt ceiling
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