Republicans are one step closer to their economic-rapture wet-dream today, as the United States will have reached the national debt ceiling on Monday, May 16th.
WASHINGTON — The debt-laden US government’s credit card will hit its limit Monday, creating a cash crunch that puts the country’s credit standing at risk as politicians battle over its long-term deficit.
Reaching the $14.29 trillion ceiling set by Congress will not have an immediate impact on government finances, because the Treasury has found about ten weeks of wiggle-room in short-term adjustments and an unexpected April jump in tax revenues. [...]
If nothing is done by about August 2, there is a chance the United States, which has always merited a top-grade credit rating, could do the unthinkable — default on its debt payments.
Even though we still have until August 2nd to raise the debt ceiling before complete hell breaks loose, I would be shocked if the market doesn’t display some signs of pessimism and anxiety today. After all, this congress doesn’t exactly instill one with a great deal of confidence.
You can bet the limited amount of time Timothy Geithner has bought us will not prevent Republicans from saying “look, we’re at the ceiling and nothing happen” though