US debt ceiling: looming default around the corner?

The United States debt ceiling was created by Congress with Second Liberty Bond Act of 1917, thus allowing the US Treasury to issue bonds and take on debt without the need to involve Congress and take any approval, as long as the debt level remains under permitted debt ceiling. The issue is of profound importance for stability of financial markets around the world as a US default on its debt obligation is unthinkable as of now, though the narrative is getting weaker every time the issue comes to the headlines as the federal government officials are realising that the debt has gone off the charts. Time and time again the Democrats and Republicans have fought in the House and the Senate over the suspension/enhancement of debt ceiling and every time the matter has been resolved even if at the last moment, and many times the debt ceiling has been raised as a routine without any debate. The US debt ceiling is raised around 90 times (in one form of another) in last 100 years and it has never been reduced!

As of the most recent clash, The US had officially hit its $31.4 trillion debt ceiling on Jan 19, 2023 and the Department of Treasury has been using extraordinary measures to ensure that the federal government can pay its bills. Analysts from Goldman Sachs and Citi have mentioned that Treasury could run out of its extraordinary measures by first half of June,2023 on account of weaker tax collection data in month of April, even though exact date could fall anytime between June and August, 2023.

2011 debt-ceiling crisis remains the most severe so far when US sovereign debt received its first ever downgrade by S&P, lowering the credit rating one grade to AA+ with negative outlook.