The United States has raised its Debt Ceiling many times before the United States debt-ceiling crisis of 2011. These increases were not usually coupled with an ongoing global economic crisis. The Debt Ceiling and the impact of its management have been an important part of the macroeconomics of the US finance system for the past 223 years.
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A statutorily imposed debt-ceiling limit has been in effect since 1917 when the US Congress passed the Second Liberty Bond Act. Before 1917 there was no legally binding debt ceiling in force, but there were parliamentary procedural limitations on the level of possible debt that could be held by government.
The legal practice before 1917 was this:
Historical precedence
US government indebtedness has been the norm in the financial history of the nation. The carriage of debt in Western Europe and North America by governments has been normal for the past 200 years, so the US situation is not unique.
The process of setting the debt ceiling is separate and distinct from the regular process of financing government operations, and raising the debt ceiling neither directly increases nor decreases the budget deficit.
The US government passes a federal budget every year. This budget details projected tax collections and outlays and, therefore, the amount of borrowing the government would have to do in that fiscal year.
A vote to increase the debt ceiling is, therefore, usually seen as a formality, needed to continue spending that has already been approved previously by the Congress and the President.
The Government Accountability Office explains, "the debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred."[2] The apparent redundancy of the debt ceiling has led to suggestions that it should be abolished altogether.[3][4]
State governments have different legal debt-ceiling constraints that should never be confused with the Federal Government's debt ceiling:
At the beginning of the 19th century, the US was still financially unstable from its war of independence. The War of 1812 created conditions that required the US to borrow money into the 1820s.
The US Civil War (and its long term effects) forced the US to borrow large amounts from 1862 to 1880. During this time the US currency was more or less a fiat currency.
Depending on who is doing the research, it is said that the US has raised its debt ceiling (in some form or other) at least 90 times in the 20th century.[1]
A statutorily imposed debt ceiling has been in effect since 1917 when the US Congress passed the Second Liberty Bond Act.
The US Congress has raised the debt limit some 8 times in the decade 2001-2011. Since 1965, this frequency of Debt Ceiling increases is about on average.[2]
Yearly deficits since 2001 coupled with the persistent increases in debt held by government accounts has led to repeated increases of the Debt Limit in the 21st century.
This table should show all the changes in the US Debt ceiling since 1788 to the current day.
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| Year | Debt ceiling amount | Debt ceiling change | % change | Source |
| 1788 |
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| 1917 |
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| 1945 |