What is debt ceiling?

Imagine you have just graduated from college and are trying to survive.

To simplify things, let's say that you make $100 a month, but need $150 to survive. Unless you want to die, you're going to need to borrow the money. So you go the bank and borrow $50, and you promise you'll pay them back when you get the money. But a few months later, you are still making $100 a month and you can't afford to pay back the bank. So you borrow $50 from one bank to give to another bank so they don't like take your house. However, this just means from now on you're going to be $100 in debt, but it's your only option unless you want to die. Imagine this x1000000.

So, the debt limit basically says "At a certain point, we have to either start making more money or reduce what we're spending the money on so we don't spiral out of control."

However, that's harder than it sounds. Go back to the scenario I mentioned before. It's going to take you a few years to get the experience to get a new job, because you don't have enough experience and no one will pay you the amount you want. So you can't increase revenue. And you can't really reduce what you're spending because you're pretty much living on the bare minimum already.

So to go back to the debt limit on the government, it is basically a restriction on the government that says "if you borrow this much you will put yourself in an impossible situation and destroy America's finance system, so don't do that." Congress pretty much ignores it though. (Also, the government still ALWAYS pays everyone we owe back, but keeps borrowing small amounts of money from other countries to do so.)

So whenever we inevitably reach the debt limit, the government refuses to cut spending or increase revenue (mostly because members of Congress wouldn't have jobs for much longer and would be even more wildly unpopular), and just keeps raising the limit. This is recipe for disaster waiting to happen, but we won't see disastrous results unless every country in the world decides they want to collect on their debts RIGHT NOW. They probably won't do that though because the United States pretty much controls the economy right now and if those countries caused the dollar to crash by asking for their money, the world would pretty much end.

It's a little confusing but I hope that answered your question.

EDIT: Here's a good video that explains some of the things I didn't cover, in case you're still confused. - https://www.youtube.com/watch?v=KIbkoop4AYE.