The Two Issues That Can Bring Down the Economy

[MindMover]

The term “crisis” is frequently overused in Washington, never more so than in budget debates. The problem is that a real crisis requires a hard deadline by which time something must happen or something terrible will happen.

There are two hard deadlines approaching, the need to raise the debt limit and expiration of all expiring tax cuts at the end of the year. These two action-forcing events, when combined with more than the usual political uncertainty over control of Congress and the White House next year, mean that the long-awaited fiscal crisis is now here.

http://www.thefiscaltimes.com/Columns/2012/03/02/The-Two-Issues-that-Can-Bring-Down-the-Economy.aspx#page1

More importantly, congressional Republicans and the Treasury both thought that the debt limit increase that had been agreed to was sufficient to get past the election. Now it appears that this may not be the case and it will be necessary to raise the debt limit before the election to avoid a default that would roil world financial markets to their core.