Since 1917, the government has had to vote on whether or not to raise the statutory limit on the amount of money the federal government can borrow, and the debt ceiling as we know it has existed since 1939. The general debt limit was introduced as an alternative to approving each act of borrowing on an individual basis. As the Wall Street Journal notes, this debate over whether or not to raise the ceiling has often been politically charged. But it has never seen the kind of gridlock we see in Washington today. Rating agency Moody's on Monday suggested a possible solution to help avoid future games of political chicken: get rid of the debt ceiling. 

President Barack Obama (White House photo stream)

The agency said, according to Reuters, that removing the debt limit would help ease anxiety amongst bond holders, which would be beneficial for the economy. Conservatives, however, maintain that the debt ceiling is a vital check on the growth of government. 

Moody's and other rating agencies have threatened to downgrade the U.S.'s credit rating from AAA status, the highest possible grade. The Treasury has warned that the U.S. will begin to default on its obligations if an agreement is not made by Aug. 2.

Meanwhile, the political rankling continues. The House this week will vote on the conservative "cut, cap and balance" plan, which would make substantive cuts to government spending, put a cap on government expenditures and introduce a constitutional amendment requiring a balanced budget. The plan has Tea-Party support but is all but guaranteed to fail in the Democrat-controlled Senate.

President Barack Obama's administration has come out in opposition of the plan, saying it would "set unrealistic spending caps that could result in significant cuts to education, research and development, and other programs critical to growing our economy."

A CBS poll shows that the public is dissatisfied with the performance of all parties involved in the debt reduction talks. Only 21 percent of those surveyed said they approve of the job done by congressional Republicans, who appear unwilling to budge on their stance against the inclusion of any revenue raising measures in a debt-reduction deal. Congressional Democrats don't fare much better with a 31 percent approval rating. Other polls have shown that much of the public opposes raising the debt limit in the abstract. The 112th Congress is taking heat for being one of the least productive in years. 

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