Treasury secretary Tim Geithner is warning that the United States will hit its $14.29 trillion debt limit by May 16th. And some weeks after that would begin defaulting on it debts. The money quote: “Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover… Default by the United States is unthinkable.” So unthinkable that in the past decade, Congress has voted to raise the debt ceiling ten times. In fact, it has done it 76 times since 1962. Lawmakers are finally threatening to get serious about tackling the budget deficit, but it seems pretty clear how this is going to end: badly.
Economists Stephen Gordon (ULaval), Mike Moffatt (Western) and Kevin Milligan (UBC), as well as Macleans.ca’s Erica Alini and guest bloggers write about the economy and economic policy in Canada, the U.S. and the world. We like charts. On Twitter, follow Stephen: @stephenfgordon; Mike: @mikepmoffatt; Kevin: @kevinmilligan and Erica: @ealini.