Failure by Congress to raise the debt limit will result in severe economic harm, Marron writes. A prolonged delay would be a powerful 'anti-stimulus' that could easily push our economy back into recession.
J. Scott Applewhite/AP/File
Today I had the chance to testify before the Joint Economic Committee about a perennial challenge, the looming debt limit. Here are my opening remarks. You can find my full testimony here.
I’d like to make six points about the debt limit today.
First, Congress must increase the debt limit.
Failure to do so will result in severe economic harm. Treasury would have to delay billions, then tens of billions, then hundreds of billions of dollars of payments. Through no fault of their own, federal employees, contractors, program beneficiaries, and state and local governments would find themselves suddenly short of expected cash, creating a ripple effect through the economy. A prolonged delay would be a powerful “anti-stimulus” that could easily push our economy back into recession.