Key terms of the US debt crisis

As US politicians race to raise the country's debt ceiling before Thursday's deadline, here is a glossary of some key terms of the debt crisis:

  • Debt ceiling: The limit on the amount that the US government can borrow. This is set by Congress and is currently $16.7 trillion
  • Congress: The US legislative body responsible for setting the debt ceiling. It consists of two parts - the Senate and House of Representatives
  • Default: This is when a borrower cannot repay a debt on time. In the case of a country, like the US, this is called "sovereign default"
  • Bond: Bonds are an IOU issued by government in order to raise money. They are usually - and especially in the case of US Treasury bonds - seen as a safe investment
  • Yield: The amount of return (or interest) that the government pays to a bondholder. This is tied to the value of the bond, which is linked to the likelihood of the issuing country repaying