Sadly, the answer is simple: Infantile poseurs in the House Republican majority are threatening to block an increase in the federal debt ceiling. Before delving further into the consequences of a debt ceiling standoff and the possible counteractions, let’s once again review what the thing is. The debt ceiling is a federal law that sets a limit on how much debt the Treasury can sell. As I’ve explained many times, the debt ceiling was not originally meant as a limit on the Treasury’s authority to issue federal debt, but rather as a way to give it more latitude to borrow. The undercurrent of complacency arises from the notion that the U.S. has never experienced the dire effects of a debt ceiling breach.
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