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.
“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 like ‘default.'”
A default would be disastrous. US debt is considered among the safest securities on the planet, the benchmark for measuring all other risk. Even a near-default could send interest rates spiking, lifting the cost of borrowing on everything from car loans to mortgages. Markets would tumble.
“Few policy matters in…