Subject: Re: The MacroEconomic Future
later this year the US will bump against the debt ceiling, and this is one of the signature issues where they can use their minority power to cause havoc.

Goofy's post on this issue a couple weeks ago has lingered on my mind. The more I think about it, the more I see this issue growing in importance in the coming months. Biden's administration is resolutely saying 'we won't negotiate with terrorists'. I see little chance for compromise, and I agree with Goofy that the House is highly likely to push this to a crisis point.

Since Goofy's post, Treasury Secretary Janet Yellen has notified us that the US hit the debt limit last Thursday and has begun taking extraordinary measures to manage affairs such that the limit isn't breached. She anticipates such measures will allow the US to pay its bills until early June.

All this begs the question as to why Biden and Congress didn't raise the limit in one of the laws they passed in the last year? Surely this relates directly enough to the budget that it could have been included in the last law passed by reconciliation? Was it a political calculation intended to trip up the new House leadership, or did key Congresspeople object, i.e. Manchin?

Inflation has been slowing, interest rates have been dropping (long term) or staying flat (short term). It seems the chances for a soft landing have been inching up, but this debt ceiling issue could throw a wrench in that game plan.