The debt ceiling sets the limit on how much the U.S. government can borrow to meet its current obligations.

If the country were to ever reach the ceiling, the consequences would be catastrophic.

The government wouldn't be able to pay for its basic functions.

The purchasing power of the dollar would fall.

Interest rates would spike, and the U.S. credit rating could go down, increasing the cost of borrowing in the future.

With such dire consequences, it may come as a surprise that only the United States and Denmark even have a debt ceiling.

The American incarnation was established in 1917 with the passage of The Second Liberty Bond Act.

Its initial purpose was to provide the federal government with more flexibility when it came to managing its finances.

Prior to the act, Congress had to authorize each instance of debt incurred by the nation.

With the ceiling in place, the Treasury had the power to borrow more freely, only requiring Congress to act each time the previously agreed upon limit was reached.

Even though the debt ceiling is designed to limit government borrowing, it has increasingly become a political bargaining chip rather than a spending safeguard.

Like a national game of chicken, the two parties repeatedly wait until the last second to raise or suspend the limit in an effort to earn budgetary concessions from across the aisle.

In 2011, the Budget Control Act, which raised the debt ceiling, was passed just HOURS before the Treasury was set to default on its debts.

This uncertainty caused America's credit rating to drop for the first time in history, increasing the entire nation's interest rates.

While the US wrestles with its borrowing cap, most other nations take a different approach, measuring debt relative to economic output.

These nations operate on the presumption that if funding has been allocated for something the government has the money or will borrow to pay for it.

It has been argued by some economists that the debt ceiling should be repealed to avert unnecessary financial crises.

But others considered it a necessary check on government spending.

As the past has shown, the debt ceiling is likely to be a continuous and contentious problem, with 11th hour politics and showdowns controlling the trajectory of U.S. fiscal policy.

Regardless of whether it remains or it gets overhauled, one thing is certain.

Whenever our debt pushes against the ceiling, the country is listening for cracks.

What do you think?

Is keeping the debt ceiling a good idea?

Or should we allow the Treasury to borrow without this limit?