interestingly of all developed countries only the US and Denmark of all places have a debt ceiling.
http://en.wikipedia.org/wiki/History_of_United_States_debt_c...
> In 1917 (and during World War I) the Debt Ceiling Law was passed, which allowed the executive branch to issue bonds and take on other debt without Congressional approval, as long as the total debt fell under the statutory debt ceiling.
I find it interesting that a law which was passed nearly 100 years ago to free up the executive branch from being constrained by congress has now resulted in the executive branch being bent over a barrel by congress.
Congress isn't going to cede it's power to control spending -- the debt ceiling is a hack that gives the President the autonomy to operate while continuing to give Congress the power of the purse.
Take Australia. The government proposes a budget and the senate reviews it and after making any changes they decide are required and the government agrees, it passes.
In the situation where a deal can't be made and the senate blocks supply of money to the government the "politically neutral" governor general can dismiss the government and force an election.
This has happened once:
http://en.wikipedia.org/wiki/1975_Australian_constitutional_...
In every other country, public debt is kept in control the same way everything else is: by the opposition parties raising hell when it gets out of control. For this to work, of course, you need to have more than two viable parties.
It's basically a mandate for governments to act in a procyclical way instead of a countercyclical one as reason would suggest. Fortunately, that makes the mandate so obviously stupid that no one really cares about it during a recession or in other special circumstances (like the German reunification)