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The US has a history of having its debt grow, increasing the debt ceiling and repeating the cycle: enter image description here Source

Normally, the states don't default on debts denominated in their own currency, because they can always print more money. However, there are exceptions (e.g. Russia 1998).

Although probably there isn't much economic sense for the US to default, not defaulting requires the congress to increase the debt ceiling each time.

Is it possible that in the foreseeable future for whatever reason this mechanism of constantly increasing the debt ceiling will break and the US will default on its debt?

kandi
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    Is it possible? Yes. Is it realistic? That's asking us to predict future events, and that is off-topic on this site. – Joe C Oct 10 '21 at 09:18
  • The graph is a bit misleading. It doesn't distinguish between suspensions which increased the debt ceiling post-facto (by whatever it had increased by already) and "preemptive" actual increases of the ceiling by some specified figure. I would not totally vouch for the accuracy of https://i.stack.imgur.com/IDog1.png but it appears to try to make this distinction. – the gods from engineering Oct 10 '21 at 09:21

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Yes

Not because the US cannot pay, but rather because it might not decide to pay. The debt ceiling has become a means of political blackmail, and one or the other side might miscalculate, "call a bluff," or back itself into a political corner.

The image you have shown is a bit misleading. The article you linked also gives a chart of debt limit to GDP, which is also worrying but much less so than the first chart. Being in debt to the tune of one year's GDP did happen during WWII and the Korean war, and did not break the country.

o.m.
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Rating companies have basically taken this possiblity into account after the standoff of 2011, factoring it in the credit rating of the US... a little bit:

Mukherji said S&P's action would be the same in the case of debt nonpayments by other countries and that even a default on a single U.S. Treasury bill, note, or bond would push the U.S. rating to the bottom of the scale.

"We don't think it's going to happen," he told Reuters. "That's why we have a AA-plus rating, the second highest on our scale."

In 2011, S&P downgraded the top rating of the United States by a notch to its current AA-plus level. [...]

The nation had top credit ratings with all three major credit rating agencies until S&P's August 2011 downgrade amid a previous round of political battles over debt, deficits, and the debt ceiling.

the gods from engineering
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