Economic Insights – August 2011

Earlier this month, America succeeded in averting the “partial shut-down” of the federal government, which would have occurred had we not raised the “debt ceiling.”  While a partial shut-down would have been disruptive to the receivables departments at government contractors, as well as for a large number of furloughed bureaucrats, it would have had little or no impact on America’s credit rating. On the other hand, the unwillingness to cut $6 trillion or so in cumulative deficits planned for the next 10 years means that we’re still subject to downgrades. In hindsight, the primary impact of t.....