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Discussion Paper
How the Nation Resolved Its First Debt Ceiling Crisis
In the second half of 1953, the United States, for the first time, risked exceeding the statutory limit on Treasury debt. How did Congress, the White House, and Treasury officials deal with the looming crisis? As related in this post, they responded by deferring and reducing expenditures, by monetizing “free” gold that remained from the devaluation of the dollar in 1934, and ultimately by raising the debt ceiling.