The debt ceiling is historically an ever-rising limit on debt that gives Congress a periodic opportunity to collectively wring its hands, gnash its teeth, and pat itself on the back in the end for "Â…doing the right thing" and jacking it up yet again.
In a word, the artificial cap Congress sets on the USA's ability to go further into debt has always been a sham... and it still is. Debt is not necessarily a bad thing, per se. Most Americans couldn't own a home without the ability to get a mortgage (incur debt), and the American government has never operated without some level of debt. The difference is that a cap on personal debt is often set by lenders... too much, and that house is going to belong to someone else... and cannot be removed by the person trying to incur it. But on the federal side lives a debt incurred by the federal government, artificially limited by that same government, and the limits to which are periodically pushed back by that same government.
In this year's debate on the debt ceiling, a new monkey wrench has been thrown into the works. A man by the name of Grover Norquist has persuaded enough Representatives and Senators, primarily Republican, to sign a "no tax" pledge, that when he defines removing a loophole as a tax increase, that defines loophole removal for a majority in the House.
Although America is taxed less as a proportion of its economy (less than 15 percent) than at any time since 1950, the country has fought two simultaneous wars (and a couple of side actions), kept the US banking industry from fully crashing the US, and likely the world's, economy and ended the worst recession since the Great Depression a year ago. If America is to continue to do these things, and cut its deficit and debt in the process, more revenue is required as part of the debt ceiling solution. And if actual new or increased taxes are not possible, then giving money to corporations who simply drop it to the bottom line needs to stop instead.
The argument that pulling back unnecessary tax breaks will cause "job creators" to refuse to create jobs is an unlikely threat. The recession has officially been over for more than a year, and they aren't creating jobs under the existing tax policies. It's hard to see how refusing tax breaks to companies that send jobs overseas will induce them to send more jobs overseas. It is nearly impossible to correlate personal income tax breaks to hedge fund managers whose personal fortunes are not at risk without them, with job creation... they create none, with or without tax breaks.
One man has backed the Republican leaders into a position from which they see no escape, and will let the USA default rather than risk his wrath... and that is unconscionable.