The media right now is all debt ceiling, debt ceiling, debt ceiling.
It’s as if it’s a serious debate. Of course, people thought we were crazy, when we posted this last August.
Q: What are the odds that a new, conservative Congress might actually refuse to raise the national debt ceiling?
Historically, conservatives have talked a lot about cutting spending, but once they get to Congress it doesn’t happen. Given the strength of the radical, tea party conservatives, and the resonance of the issue of the deficit in general, there’s a chance this could change.
They’re likely slim, but what are the odds that a new Congress might do the unthinkable: refuse to raise the ceiling on the national debt?
This would definitely have major economic implications, and if you’re thinking about random “tail risks” this might be one to consider.