Let’s make a (debt ceiling) deal

We are now told that the so-called “X-date” (when the federal government hits the current debt limit) is fast approaching, potentially much sooner than previously anticipated. Leading economists can’t seem to agree on precisely when this will happen, with some saying “in the next few weeks” and other, more optimistic prognosticators putting the date at “some time this summer.” But either way, the date is clearly coming. The Fed can implement what are described as “extraordinary measures” (bookkeeping tricks) to push the deadline back a bit, but that will only hold for so long. This leaves us with two obvious questions to address. First, why is it happening so much sooner than expected? And second, what’s to be done about it?Read More