For your entertainment, I now provide this handy little cartoon:
Bear in mind that was back in 1996, and so the numbers might be different. The same monster still lives there though.
The thing to remember about the Debt Ceiling is that the only reason it exists is because of the operation of legislation. The Second Liberty Bond Act of 1917 and the 1939 and 1941 Public Debt Acts are the instruments which determine the aggregate limit on the total value of US Government bonds that can be issued.
The Debt Ceiling is established by the Congress and is actually quite independent from the US Federal Budget. The US Federal Budget is produced by the Executive Branch and specifically the Department of the Treasury. It's almost as though the Treasury develops the budget without working out how to pay for it.
The Debt Ceiling it should be noted has been raised 74 times since the last time it was actually lowered back in 1962. This so-called "crisis" is dubious at best and is little more than a political smokescreen to hide the far worse underlying issue - a huge debt hole.
As of now the US Govt rakes in about $2,300bn a year. The Interest bill on previous debt comes in at about $225bn and "Mandatory" spending is worth about $2,108bn a year. Right away even in the US Federal Government cut all "Discretionary" Spending to ZERO, there'd still be a shortfall of about $333bn.
In fact the last time a genuine surplus was achieved, that is when Taxation Receipts exceed Government spending was back in 1958.
If you are looking for someone to blame then blame Presidents
Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, Obama, everyone who's sat in the Congress since 1958 and every single American Citizen who has been alive since 1958 for not holding 11 successive administrations and the Congress to proper account.
As for government debt issues, even if the United States were to cut all government spending to ZERO, which includes all "Mandatory" spending, you'd still need to collect enough in taxes to fund existing debt and interest responsibilities.
At less than 15% of GDP, tax receipts for the US Federal Govt were the lowest they'd been as a percentage since 1962.
Assuming the 2008 level of taxation before the GFC and Government Spending of ZERO it would still take until 2018 to eliminate Government debt.
Faced with such a flood of fearful, formidable, frightful and furious foulness, could such a "crisis" happen here in Australia? The answer simply is... No.
1. Because the Executive and the Legislative Branches co-exist in parliament, they wouldn't disagree with themselves.
2. Budgets in Australia aren't really any different to any other Bill placed before the Houses. If a Budget Bill was rejected three times, Parliament would shut down, we'd have an election and the first action of the new Government would be to pass a new Budget.
3. Australia has no Debt Ceiling in the first place.
Really the only thing that will happen with this artificial crisis, is that the Republicans and Democrats will yell at each other like a couple of Rangers and Celtic fans for 90 minutes and then go home. Nothing will have been solved and the underlying debt problems will persist. Oh well.