Each of us has a maximum amount of debt that we cannot exceed without getting more credit extended to us. Usually when we look at the way the government spends money–a trillion here, a trillion there–it’s hard to imagine that there is a limit to what Uncle Sam is allowed to spend. But just like an individual consumer, the federal government has a debt limit and once that limit is reached, they have to get creative to arrange for more financing.

The US Government currently has the approved ability to issue up to $12.1 trillion in debt. The government issues debt in the form of treasury bills, notes, and bonds, borrowing money from investors at a rate of return that is determined through an auction process. These bonds are issued at a discount and mature at par or face value, giving an investor the return that was agreed upon when the debt was issued. This week, the government plans to hold an auction for $123 billion worth of debt which will put them on pace to hit the debt ceiling by the end of November.

If Congress decides to increase the debt ceiling, then the government check-writing machine can continue to spend. Raising the ceiling is nothing new–it’s been done 8 times just since 2002. However, a growing number of politicians are concerned over the massive government spending we’ve seen over the first several months of the Obama administration. If the debt ceiling is not increased by lawmakers, Uncle Sam will have to get creative to gain access to more money. The likelihood of this happening is slim, but we’re close enough to the ceiling that it’s worth exploring. Here are some options they will have.

- Creative Accounting: If it’s for a short period of time, there are ways for the Treasury Department to rob Peter to pay Paul. For example, there is a sum of $113 billion currently in a retirement account for federal employees that could be accessed until a solution is found, but this amount would only last one or two weeks.

- Sell Agency Debt: The Treasury owns about $165 billion worth of debt issued by Fannie Mae and Freddie Mac that they could sell on the open market in order to access cash. However, these bonds were purchased to calm distressed financial markets, so flooding the market with them now would send a negative signal.

- Sell Dollars: The government is holding about $16 billion in order to try to stabilize the US currency. These dollars could be sold to access cash, but doing so would likely cause the value of the dollar to plummet more than it already has.

- Shut Down the Government: It’s an extreme alternative, but the government could simply shut down for a period of time until more financing can be accessed. This happened in 1995 and it was such a non-event that most people don’t remember it. The downside is that this would hurt the value of US government bonds being held around the world.

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