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What is the debt ceiling? What happens if America defaults?

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(CNN) - The United States is once again days away from reaching the debt ceiling and risking an unprecedented default on the nation's debt for the first time in history.

What, exactly, is the debt ceiling, though?

Extending the debt ceiling is necessary for the government to keep borrowing money, because as every day goes by, the United States needs to keep borrowing to keep the government open.

The money, which can reach $60 billion per day, goes far and wide to pay for such things as government workers, national infrastructure and interest on existing debt. As the spending continues, the government eventually can reach its self-imposed legal limit to borrow.

Once the debt ceiling is reached and not raised, the nation's options range from nasty to disastrous.

Currently, the United States Treasury is running right up against the nation's $16.7 trillion debt ceiling, but in the meantime, decisions have to be made in case the cap is reached.

One option is the implementation of instant austerity measures, which would hold spending at existing levels. That move could push the United States and possibly the world's economy into a recession. America could also reprioritize what it spends on and reallocate funding to other places.

The least pleasant solution is to default on the debt; a catastrophe of enormous proportions that would send confidence in the American economy tumbling. Because there's so much debt in the global economy, any form of default would have disastrous consequences for the markets.

Experts believe it would take years to clean up the chaos caused by a potential default.

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