Average citizens will pay the price for political dithering in Washington -- as usual
Is anyone else getting as nervous as I am about this debt-ceiling debate? Don't get me wrong; my view has long been that we would endure some stomach-churning days on the way to a deal. Ultimately, though, I believed that the adults in both parties would prevail and lift the debt ceiling sufficiently to get the country through the 2012 election without default.
Now I'm worried, because too many politicians on both sides of the aisle and at both ends of Pennsylvania Avenue are happily taking potshots at each other to score political points, with little regard for the stakes involved. Who knows how much patience the stock and bond markets have or when they might decide to panic at the prospect of Washington failing to come to a deal in time?
The End of Tantrums?
U.S. Economy Less Governable Than Ever
Outsiders in Name Only
Tom Gallagher, a political economist with the Scowcroft Group, likens the U.S. economy to an airplane with engine problems, just barely maintaining altitude above the tree line. Although the plane is holding its own, if almost anything else goes wrong, it will crash. Recent reports on initial unemployment claims show just how close to the treetops we are. Back in February, as The Fiscal Times pointed out last week, first-time claims had held at 400,000 or less for seven of nine consecutive weeks. Now the number has been running above 400,000 for 12 weeks. That is a pretty dramatic downshift that matches the uptick in the overall unemployment rate and the decline in the growth of the gross domestic product.