Unilateral action could be disastrous
The US government may run out of money to fund appropriated spending as early as next week if negotiators’ latest push for a debt-limit deal doesn’t pan out. Given the proximity to the X-Date and the unpredictable consequences of a default, it’s worth revisiting the options to address the impasse. The first and most straightforward path is what negotiators are currently working towards — a bipartisan deal that would lift the debt ceiling in exchange for future fiscal restraint. Such an agreement is the only good choice, in our view. With core inflation running north of 5% and a six-decade low in the unemployment rate, there has never been a better time for belt-tightening.
Continue reading the entire piece here at the Financial Times (paywall)
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Stephen Miran is an adjunct fellow at the Manhattan Institute, co-founder of asset manager Amberwave Partners, and a former senior adviser for economic policy at the U.S. Treasury, 2020–21. Dan Katz is also a co-founder of Amberwave Partners, and served as a senior adviser at the US Treasury from 2020 to 2021.
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