What’s the Debt Ceiling and Will the U.S. Raise It?: QuickTake

The very phrase “debt ceiling” sounds austere and restrictive, as if it’s a lid on government spending. In fact, the U.S. federal debt limit was first conceived more than a century ago to make it easier, not harder, for the government to borrow money.

But it morphed into an explosive political tool with the potential to roil financial markets, since a failure to raise the debt ceiling could eventually result in a first-ever default on some of the government’s obligations.

1. Why is there a debt ceiling?

Its creation, in 1917, was supposed to make it easier to finance ...