1. The United States debt ceiling crisis arose because the legal debt limit was reached while budget deficits continued to rise the debt levels. 2. Failure to raise the debt ceiling would force the government to cut spending by 40% and potentially default on debt payments, causing severe economic consequences. 3. Standard & Poor's downgraded the US credit rating from AAA to AA+ for the first time due to concerns over large budget deficits and increasing debt levels undermining long-term economic growth.