An 11th-hour deal saved the U.S. from defaulting on its debts in 2011. Much the same scenario is unfolding now, with potentially even more dire consequences, and there are major differences between then and now that make a bad outcome far more likely.
The last time the U.S. government went to the brink of defaulting on its debt — in 2011 — the stock market tumbled and there was something close to a panic across the economy before Washington came to its senses andMuch the same scenario is unfolding now, with potentially even more dire consequences, and there are major differences between then and now that make a bad outcome far more likely.
“At the moment everyone is just frozen in place. I think we have another week” before stocks turn more volatile, said Chris Rupkey, chief economist at FwdBonds, a financial markets research firm in New York. But last year, just 18 such Republican victories were in swing districts, and most of the new GOP House members were more ideologically conservative — or more fearful of right-wing primary challenges — than those who joined the House in 2011.
Led by Republican firebrands including Jim Jordan of Ohio, Andy Biggs of Arizona and Marjorie Taylor Greene of Georgia, the Freedom Caucus nearly torpedoed McCarthy’s bid to be speaker and has wielded significant influence in partisan politics. So far, analysts say, there isn’t a sense of urgency — and probably won’t be until investors and others push the two sides to the table for serious talks.
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