1 - A ceiling created in 1917
As in any democracy, the Federal Parliament votes annually on the state budget. As a general rule, the budget law contains a deficit to be filled by borrowing. However, since 1917, Congress has added one measure to this budget impasse: the debt ceiling. The provision was originally designed so that the government could issue additional government bonds to finance the United States' entry into the war on the side of the Triple Entente (France, United Kingdom, Russia). This "ceiling" was therefore supposed to limit the additional volume of Treasury bonds that Washington could put on the market.
After the armistice of 1918, for decades, this limit seemed a mere formality. Regularly, Congress voted to raise it to allow the Treasury to borrow the amounts needed to cover deficits. This has happened 90 times since 1917 (set in 2021, the current cap is $31.400 trillion). Nevertheless...
This article is for subscribers only. You still have 73% to discover.
Want to read more?
Unblock all items immediately.
TEST FOR 0,99€
Already a subscriber? Log
