Once upon a time, the debt ceiling was something that made it easier, not harder, for America to pay its bills. Over 100 years ago, before the first world war, whenever the U.S. Department of the Treasury needed to issue bonds to finance government spending, it had to seek approval from Congress. But after German U-boats began sinking U.S. merchant ships in 1915, killing thousands of Americans and eventually helping to pull the nation into war, the U.S. needed to quickly raise funds to arm Allied forces. Thus the debt ceiling was born in 1917, to allow the Treasury to issue debt on its own as long as it didn’t surpass a $9.5 billion limit for Treasury bonds and a $4 billion limit for one-year certificates.
The national debt ceiling was later modified during World War II to its current aggregate debt limit. But little did the wartime Congresses of 1917 and 1939 know what their debt ceiling would eventually turn into.
