Monday, November 22, 2010

What Keeps You Up At Night?

Leading economic policy-makers are concerned about a "trigger" event which sets in motion a series of events that might well lead to a financial crisis similar to the one that nearly caused the global economy to implode in the autumn of 2008. The trigger event then was the collapse of Lehman Brothers. The trigger event that some very serious people are worried about now is a Congressional vote on raising the debt ceiling.

Said ceiling will be reached sometime in April of 2011. At that point, the US will either have to raise the debt ceiling to remain current on its outstanding obligations or it will have to cease (most) governmental operations for some period of time until it is able to come up with a way to meet those obligations.

There are any number of new arrivals in Washington, DC who are adamantly opposed to raising the debt ceiling. The newly-elected Speaker of the House is asking them not to draw this particular line in the sand. Clarity on this issue would be most helpful, sooner rather than later. Don't hold your breath.