The United States’ fiscal emergency will not be over until a bill to raise the debt ceiling has passed both House and Senate and President Barack Obama has signed it. This can still be done by Tuesday’s deadline. As this column went to press, a deal looked within reach.
Better take nothing for granted – except Washington’s flair for making easy things hard. But suppose, with or without a market eruption to focus minds, the deal is done. What would be the consequences? For the economy, once relief at avoiding default subsides: not good. For Mr Obama’s standing and hopes of re-election: between bad and dire.
Preventing default is good, but lifting a threat that should not have been made in the first place is little to boast about. It is worth stressing that the history of the past few months cannot be unlearned. Will this farce recur every time the debt ceiling needs raising? That question is a new risk factor in its own right.