Once again, Congress threatens a federal budget crisis

The U.S. Capitol

Congress has just ten days left to decide whether it wants to shut down the government. And then sometime in the middle of next month, we face the possibility of defaulting on our national debt if Congress doesn't agree to raise the debt ceiling.   

Are you getting a sense of déjà vu about now?  If so, you’re right.  

Once upon a time, in the spring of 2011, we were also on the brink of a government shutdown, which didn’t happen. Then, a few months later in August of 2011, we came dangerously close to defaulting on our nation's debt. That didn't happen either. Since then, we had more, similar scares: government shutdowns, the fiscal cliff. 

It's enough drama to want to hand Congress a cup of warm milk and read them a bedtime story. Oh, I don't know, maybe..."The Boy Who Cried Wolf"?  

That fable actually had a happier ending than we could be looking at, according to Darrell West, director of Governance Studies at the Brookings Institution. “We hope this is the ‘Boy Who Cried Wolf,’ because in that story, it didn't happen,” West said.

The reason these threats of government shut downs and debt defaults keep being sounded in the last few years goes back to 2011, said West. That’s when a lot of Republicans were voted into Congress by folks who felt the government was spending much too much. That new class in Congress has since used threats to show how serious they are, and then -- at least in most cases, aside from the sequester that actually did go in to effect last spring -- talked themselves off the cliff at the last minute.

West said the fear this time is “whether House Republicans are so upset about government spending that they are literally willing to walk to the top of that cliff and jump off.”  

Maybe some cliff-jumping about now wouldn’t be such a bad thing, said Josh Green, who covers politics for Bloomberg Businessweek. “I’m sort of rooting for a government shut-down,” he added. “At a certain point you've got to kind of lance the boil and say ‘who's going to pay the price if the government does shut down?'”

Green said a temporary government shutdown would be disruptive, but probably not do long-term damage to the economy. On the other hand, he said, defaulting on the debt limit could be the stuff of nightmares -- wolves, cliffs and all.

About the author

Krissy Clark is the senior reporter for Marketplace’s Wealth & Poverty Desk.

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