The base case for most Wall Street economists is that somehow a debt ceiling deal gets done at the last second, preventing a breach.
But how we get from there to here remains something of a mystery.
For now, there’s been zero progress. At all.
But, remaining optimistic, Nomura economist Lewis Alexander identifies some vague positive developments.
Here’s his key observation:
…the debate is expanding beyond the Affordable Care Act (ACA, “Obamacare.”) The ACA is a uniquely partisan issue on which neither side is inclined to compromise. Expanding the discussion to include other issues — such as long-term entitlement reforms and near-term constraints on spending — would provide more scope to find a solution.
Basically, the good news is that Obamacare is no longer the issue, and the GOP is talking about areas where Democrats might be slightly more inclined to deal.
That’s thin gruel, but for now, you better enjoy it!
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