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.