Drama over the debt ceiling is the last thing America's economy needs
New York (CNN Business)America's road to economic recovery is littered with obstacles, beginning with soaring inflation and the rapidly spreading Covid-19 Delta variant. Now political bickering in Washington is looming as yet another hurdle.
If Congress doesn't raise the debt ceiling, the federal government will likely run out of cash by October or November, according to the Congressional Budget Office. Senate Minority Leader Mitch McConnell is already vowing that Republicans will not vote to raise the federal borrowing limit — even though failing to do so risks a default that would tank the economy.
This raises the specter of Washington repeating the mistakes of the 2011 debt ceiling debacle by gambling with the full faith and credit of the United States. That episode sent markets into a tailspin and resulted in the unprecedented downgrade of America's prized AAA credit rating.
"The last thing the economy needs is an artificial crisis," said Joe Brusuelas, chief economist at RSM. "The risk is that the political polarization in Washington is so intense that politicians who should know better begin to throw around words …
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