IS THE US HURTLING TOWARD A DEBT


CEILING CRISIS? The US Federal Government may be hurtling toward a debt ceiling crisis and another possible government shutdown.


  1, 2019, and the US Treasury has been managing its cash carefully to stay under the ceiling. With  December 2017 corporate tax cuts, time will run out on the US Treasury’s ability to stay under the debt   authorized US Federal Government funding will end on September 30, 2019, unless the US Congress and the President can agree on new funding for Fiscal 


The only way to raise the debt ceiling and fund the US Federal Government for 2020 is to craft a compromise acceptable to the Democratically-  Republican-controlled US Senate, and President Trump. We note, though, that whether the issue is the trade war with China, building the wall between  to testify about the Mueller report, President Trump, feeling that he holds the stronger hand, does not appear to be in the mood to compromise. Thus, the odds on a debt ceiling and funding deal just seem to be getting longer every day. So yes, it does appear for now that the US is hurtling toward a debt ceiling crisis and a possible government shutdown in October 2019 that might undercut economic  


First, we will cover a little of the history of debt ceiling. Then, we will examine the potential economic impact of a debt ceiling and shutdown crisis as well  some lessons from Brexit that may apply to analyzing the willingness of politicians to compromise.


Chart 1: Saudi Net Foreign Assets vs. Brent Crude Price


Source: Bloomberg Finance L.P.


24 | ADMISI - The Ghost In The Machine | May/June 2019


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