Note: A version of this episode first ran in 2023.
Every year, the U.S. government spends more money than it takes in. In order to fund all that spending, the country takes on debt. Congress has the power to limit how much debt the U.S. takes on. Once we reach that limit, Congress has a few options so that the government keeps paying its bills: Raise the debt limit, suspend it, or eliminate it entirely.
Which is daunting, because if lawmakers don't figure something out in time, the ramifications for the global economy could be huge.
Shai Akabas, of the Bipartisan Policy Center, has become something of the go-to expert in calculating the exact date America would hit the wall and not be able to pay all its debts. This day is so terrifying it has a special name, the X-Date.
Today's episode is about how Akabas and Jay Powell — long before he became chair of the Federal Reserve — worked to create a system to determine the X-Date with the hope of helping us all never reach it.
We also have an update on this year's looming X-Date, which could arrive as soon as this summer.
This original episode of Planet Money was produced by Sam Yellowhorse Kesler with help from Alyssa Jeong Perry. And engineered by Josh Newell and fact-checked by Sierra Juarez. It was edited by Jess Jiang.
Today's update was produced by James Sneed, engineered by Jimmy Keeley and edited by our executive producer Alex Goldmark.
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Music: "Euphoria Funk" "Darkman X" and "Invincible."
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