Lifting the Debt Ceiling Isn’t a Social Policy

People cross the street next to a bus stop with a sign that shows a U.S. national debt figure in Washington on Jan. 20, 2023. Amanda Andrade-Rhoades/Reuters

Commentary

Since 1960, Congress has raised the debt ceiling 78 times. The process of increasing the debt limit has become so regular that markets barely worry about it. Furthermore, as the 2011 debt ceiling crisis showed, the impact on asset prices happened mostly in emerging economies. In 2011, Turkish and Indian debt were the most negatively impacted, while Treasurys rose.