The concept of a debt ceiling was first introduced in the United States in 1917 as a way to finance World War I.
The US has experienced numerous debt ceiling crises throughout history, with the first default occurring in 1979 when the Treasury missed payments due to technical glitches.
The debt ceiling, which is the maximum amount of debt the US government can legally borrow, has been raised over 100 times since it was first implemented.
In 2011, the US came perilously close to defaulting on its debt when Congress failed to raise the debt ceiling in a timely manner. This resulted in the first-ever downgrade of the US credit rating by Standard & Poor's.
The debt ceiling does not control or limit government spending but rather determines the government's ability to finance the spending already approved by Congress.
The US Treasury employs extraordinary measures to continue funding the government when the debt ceiling is reached, including suspending investments in certain government funds and borrowing from other accounts.
The debt ceiling debate often becomes highly politicized, with both major political parties using it as leverage to push their policy agendas.
Despite the potentially catastrophic consequences of a default, some politicians have advocated not raising the debt ceiling as a way to force fiscal responsibility and reduce government spending.
The US debt has been steadily increasing over the years, and as of 2023 , it stands at ($31.46 T), posing ongoing challenges for the country's economic stability.
The debt ceiling is a self-imposed constraint, and unlike most countries, the US is one of the few that has such a mechanism in place.
The potential consequences of a US default on its debt include skyrocketing interest rates, a loss of confidence in the US dollar as the global reserve currency, and a severe economic downturn with global ramifications.