What Could “Irreparable Harm” Look Like if Lawmakers Fail to Extend or Suspend the Debt Ceiling Limit?
When lawmakers took the U.S. to the brink during the 2011 fiscal policymaking process, there were real negative financial consequences. There could be similar consequences if lawmakers follow a similar pattern in 2021. Unfortunately, this could be the best-case scenario based on where negotiations are today.
More severe financial consequences could occur if lawmakers allow a brief default, even if it is quickly cured.
There could be even more severe negative financial consequences–lasting a generation or more–if lawmakers allow an extended stalemate. We include details related to different scenarios below.