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Image description: This infographic shows a breakdown of what the average American household buys, based on data from the Bureau of Labor Statistics for December 2011.
Housing costs made up 41 percent of spending, with food, healthcare and transportation costs also accounting for a large portion of spending.
Clothes and entertainment made up the smallest percentage of overall spending.
Infographic from Lam Thuy Vo / Planet Money

Image description: This infographic shows a breakdown of what the average American household buys, based on data from the Bureau of Labor Statistics for December 2011.

Housing costs made up 41 percent of spending, with food, healthcare and transportation costs also accounting for a large portion of spending.

Clothes and entertainment made up the smallest percentage of overall spending.

Infographic from Lam Thuy Vo / Planet Money

Buying a new car is a big decision. Use these tips to make sure you are prepared before you go car shopping.

What is the Debt Limit?

The federal government can borrow money to pay its bills, just like taking out a loan. The debt limit is the maximum amount that Congress allows the government to borrow, similar to the credit limit on a credit card. The government will exceed the current debt limit of $14.3 trillion dollars on August 2 unless Congress votes to raise the limit before that date.

Raising the debt limit would let the government borrow enough money to pay bills that it already owes, such as Social Security and Medicare benefits, military salaries, interest on the national debt, and tax refunds. It does not mean that the government has decided to spend more money.

According to the U.S. Treasury, “Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans.”

This isn’t the first time that the government has reached its debt limit. The limit has been raised, extended, or revised 78 times since 1960.

Learn more about the debt limit from the U.S. Treasury.

If you’re only making minimum payments on a credit card, find out how long it will take and what it will cost to pay it off.

White House Hosting Live Chat This Afternoon

The White House invites you to participate in a live chat about improving government websites today at 4pm EDT.

There are currently more than 2,000 federal government websites. While many of these provide valuable services and information, the volume of government websites can make make it difficult to find authoritative, official information.

In an effort to reduce wasteful spending, government agencies have restricted the creation of new .gov websites and set a goal to reduce number of existing sites by half over the next year. The government will eliminate sites that are no longer needed.

As a first step to understanding what’s working and what isn’t, the White House wants to get your feedback on the existing government websites.

Here’s how you can participate: