This is Planet Money from NPR.

Hello and welcome to Planet Money, I'm Alexi Horowitz-Gazzy.

Yesterday, Treasury Secretary Janet Yellen sat down in front of members of Congress in Washington,

and she said something that sounded pretty scary.

She said if Congress doesn't vote to raise the debt ceiling, the U.S. government will run out of money by October 18th.

That's right, in less than three weeks, America would go effectively broke if Congress didn't give permission for more government borrowing.

More debt.

This would be the first time in its history the U.S. Treasury would not be able to pay its bills.

It would default.

And the result, Yellen said, if that did happen, would likely be another financial crisis.

All of which raises a couple of very important questions.

What exactly is the debt ceiling?

And why does the U.S. government have to keep raising it or risk financial collapse?

So, we're pulling today's episode from the vault about a time when America had no debt, paid it all off.

And little spoiler? Government debt isn't necessarily a bad thing.

This episode originally ran in 2011 and was reported by Robert Smith and Adam Davidson.

Coming up after the break.

First up, really basic question.

What exactly is the national debt?

It's key to not think of it as one thing.

Because it's actually a bunch of promises.

It's millions and millions of specific promises that the government has made to specific people.

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