What is "debt limit"

n. the maximum borrowing power of a governmental entity [syn: debt ceiling]

A debt limit is a legislative mechanism restricting the total amount that a country can borrow or how much debt it can be permitted to take on. Usually this is measured as percentage of GDP. A handful of countries have debt limitation laws in place. Among the more famous cases is the United States debt ceiling but there are several other countries that have debt limits.

Poland is the only nation with a constitutional limit on public debt, set at 60%. By law, a budget cannot pass with a breach in place.