The ceiling was created in 1917 to simplify borrowing. Since 1960, Congress has raised, suspended, or redefined it about 80 times.
Why does it always blow up? Arithmetic. Fiscal year 2025: a $1.775 trillion hole. The last federal budget in surplus was in 2001. On interest on the debt alone, the government paid $1.22 trillion in 2025, nearly a quarter of federal revenue.
To pay it, more debt. Yesterday's creditors repaid with tomorrow's creditors' money.
A pyramid scheme by definition, with two differences: participation is mandatory, and the manager prints the currency it repays with. It never defaults explicitly; it does so gradually, by diluting the purchasing power of the dollars in circulation.
The expansion of the money supply is neither right-wing nor left-wing: it's the one thing the right and the left agree on.
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naddr1qq…5tpq"I am very pleased to announce that, after all these years, I agree with Senator Elizabeth Warren on SOMETHING. The debt ceiling should be completely eliminated to prevent an economic catastrophe."
Donald Trump had written these words on Truth Social in June 2025, capitals included. Warren had responded in the pages of the New York Times with an editorial titled "Trump is right: let's abolish the debt ceiling." It could have seemed like a passing flirtation, the kind American politics produces and forgets within a weekend.
On Wednesday the president returned to the charge and the senator responded within a few hours:
Elizabeth Warren@SenWarren Donald Trump is right about this: Eliminate the debt limit—its only real function is to threaten an economic crisis. I'm ready to work with both Democratic and Republican Senators to immediately scrap the debt ceiling and protect the economy. 7:20 PM · Jul 29, 2026 · 1.99M Views 3.12K Replies · 264 Reposts · 3.27K Likes "Donald Trump is right about this: eliminate the debt limit, its only real function is to threaten an economic crisis," Warren writes, ready to "work with Democratic and Republican senators to immediately eliminate it and protect the economy."
Tariffs, taxes, the Fed, immigration: the two have gone at each other on everything for a decade. The only proposal capable of bringing them together is the removal of the only limit on the growth of American debt.
It's worth taking a close look at what they're abolishing.
The debt ceiling was born in 1917 to simplify borrowing, not to restrain it: until then Congress approved every single bond issuance; from then on the Treasury could borrow freely under an overall limit. And that limit has done one thing in its entire history: move upward. Since 1960 alone, Congress has raised, suspended, or redefined it roughly 80 times.
James Lavish, manager of the Bitcoin Opportunity Fund, summed up the saga with one line and a chart:
James Lavish@jameslavish Narrator: There never really was a debt limit. Elizabeth Warren@SenWarren Donald Trump is right about this: Eliminate the debt limit—its only real function is to threaten an economic crisis. I'm ready to work with both Democratic and Republican Senators to immediately scrap the debt ceiling and protect the economy. 3:50 AM · Jul 30, 2026 · 75.9K Views 45 Replies · 105 Reposts · 759 Likes "Narrator: there never really was a debt limit." In the chart, debt rises at the same slope under Republican and Democratic presidents, the black staircase of the ceiling chases it upward in steps, and the gray bands mark the years when the limit was formally suspended - that is, nonexistent.
Today's numbers complete the picture. Federal debt hit $39.8 trillion this week. The ceiling sits at $41.1 trillion, after the One Big Beautiful Bill raised it by $5 trillion just a year ago, when the debt was running at $36.2 trillion. In plain terms: $3.6 trillion in new debt in 13 months, with the next breach expected in the first half of 2027.
Why does the ceiling always break? Arithmetic.
In fiscal year 2025 the federal government collected $5,235 billion and spent $7,010 billion: a $1,775 billion hole. The current fiscal year is running at the same pace, with $1,367 billion in deficit over the first nine months. The last budget surplus dates back to 2001: a quarter century of outlays exceeding revenues, without a single exception.
Outlays, moreover, are incompressible: pensions, healthcare, welfare, defense. No candidate wins an election promising to cut Social Security, so the gap is covered by issuing new debt. And on that debt, interest accrues: $1,220 billion in fiscal year 2025 alone, nearly a quarter of all federal revenues. To pay those too, more debt.
The mechanism has a precise name: yesterday's creditors are repaid with the money of tomorrow's creditors. A Ponzi scheme, textbook definition. With two differences from private ones: participation is mandatory and the manager prints the currency used for repayment.
The second difference is the decisive one, because it eliminates the classic ending. Madoff failed when redemptions exceeded new inflows; a state denominated in dollars that it can create from nothing never fails explicitly. It fails implicitly: every dollar issued to cover the hole dilutes the purchasing power of those already in circulation. The bill doesn't blow up - it spreads. Across all dollar holders, every day, without anyone signing anything.
Debt will keep rising and the dollar will keep losing purchasing power, all the way to the final destination of every currency managed this way - hyperinflation. When? Impossible to say, and anyone putting dates on it is in a different business. The direction, however, has stopped being a matter of opinion.
Technically Warren and Trump are right. The debt ceiling arrives after the fact: spending is decided by Congress through laws voted months earlier, and when debt hits the limit the money is already committed. The ceiling's only leverage is to threaten default on obligations already made, and that is why every showdown has ended with a raise. A constraint that yields 100% of the time protects little and blackmails a lot: on this, the senator is telling the truth.
The point is what the admission means. Among all possible reforms of America's finances - a paydown plan, a spending brake, a fiscal rule - the first and only one that unites the two opposite poles of Washington is the cancellation of the last formal limit on debt. Rather than discussing how to slow the race, they remove the speed-limit sign.
Some misgivings do survive within the president's party. John Thune, Senate Majority Leader, commenting on the proposal: "40 trillion in debt, I'd say, should get our attention." Anthony Pompliano was less diplomatic with the senator: "This probably goes so hard, if you're stupid."
The substance, however, remains: the American monetary system has just certified, in a bipartisan manner and in broad daylight, that debt must have no limits. Those who have been saying this for years were dismissed as extremists. Now the White House and the most prominent progressive senator in America are saying it - together.
Elizabeth Warren built the latest stretch of her career on a war against Bitcoin: in 2023 she relaunched her reelection campaign with the slogan "I'm building an anti-crypto army", she authored the Digital Asset Anti-Money Laundering Act to extend banking KYC obligations to self-custodial wallets, miners, and validators, and she repeated in every venue that Bitcoin serves criminals and threatens national security.
The same senator has just put her signature under Bitcoin's core thesis: a monetary limit decided by politics is worth only as much as the next vote. Satoshi Nakamoto, presenting the project in 2009: "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."
Seventeen years later the confirmation arrives in official form, complete with a bipartisan appeal. The best possible ad, free of charge: the regulator most hostile to Bitcoin explaining to the world why Bitcoin exists.
After all these years, I admit, I agree with Senator Warren on SOMETHING too: the debt ceiling should be abolished. It was theater and the theater has grown tiresome. The best marketing for Bitcoin, after all, has always been provided by its enemies.