The national debt: “It is the total dollar value of what the federal government owes, at any point in time, to its creditors.
The deficit: “The federal government’s budget deficit is the amount by which its annual outlays (spending) exceed its annual receipts (taxes). To pay for the deficit, the government, through the U.S. Treasury, borrows by issuing new debt. Thus, the current value of the national debt is equal to the accumulation of past budget deficits. For the federal government to remain solvent, it must eventually collect enough taxes, net of spending, to pay back this debt.”
The debt ceiling: “It is an arbitrary, upper limit on the dollar value of debt the federal government can have outstanding. This limit was imposed on the U.S. Treasury by Congress in 1917 and prevents the Treasury from issuing new debt in excess of the ceiling. … The debt ceiling is arbitrary in the sense that it is not tied to the size of the economy (say, GDP) or the rate of inflation.”
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