The Debt Ceiling Crisis That Probably Isn’t

The financial media is rife with misinformation on the debt ceiling and the jump in interest rates. However, a history review shows that the “debt-ceiling” issue is not only a non-crisis, but the recent rise in rates is likely an opportunity to buy bonds.

Let’s start with the media scare tactics over the debt ceiling:

1. If Congress doesn’t raise the debt ceiling, the Treasury will run out of money.

2. The U.S. will default on its debt.

3. The markets and economy will crash.

While there is a grain of truth behind these statements, they are largely false. However, for the media, a manufactured crisis should never be allowed to go to waste. To wit:

The jobs, benefits and financial security of millions of Americans could start disappearing in less than a month as the Republican House leverages a debt showdown to try to force big spending cuts on President Joe Biden.