The original purpose of creating a statutory debt limit in 1917 was not to prevent the government from running up too much debt, but to remove the requirement that Congress authorize individual issuances of debt. The intent was to help ensure that sufficient and timely credit would be available to finance World War I.
One hundred years later, things are very different. The main use of the debt limit now is to prevent the government from paying its bills on time, putting the nation’s creditworthiness at risk and threatening a global financial crisis.
Twice in recent years, 2011 and 2013, the nation was needlessly driven to the brink as policymakers debated over conditions for a debt limit increase in order to avoid a partial default on government obligations.
Financial markets, government creditors and the public looked on with increasing horror and frustration. Yet, there is no guarantee that similar brinkmanship on the debt limit will not be used in the future.