Friday, October 9, 2015

PhillyInc starts Monday staring at the debt ceiling

The lack of a political solution to raise the debt ceiling has investors unnerved and watching the calendar.

PhillyInc starts Monday staring at the debt ceiling

The U.S. Capitol Plaza in Washington, quiet on Sunday morning.
The U.S. Capitol Plaza in Washington, quiet on Sunday morning. J. Scott Applewhite / Associated Press

The only story anyone's talking about is the lack of agreement in Washington on raising the debt ceiling.

So the U.S. stock market looks like it will open lower, based on trading in the futures markets.

To me, what's distressing is how little policymakers seem to have learned from the financial crisis and the consequences (intended or otherwise) of action or inaction. OK, maybe policymakers did learn some lessons, but we seem to be trapped in a vicious circle of point/counterpoint as we near the Aug. 2 deadline for lifting the $14 trillion limit on debt.

Forget can-kicking. I'm not worried the federal government might bounce a check in August. If no deal is reached by Aug. 2, we will have lost the right to scoff about Europe's inability to get its fiscal house in order.

The criticism I keep hearing regarding the European debt crisis is that leaders could have minimized the damage in Greece, Ireland and Portugal through decisive action rather than half-measures. The rhetoric emanating from different nations was (and still is) confusing.

Sounds exactly like a description of what's been playing out for weeks in Washington.

American business, through its financial engineering, let down the global economy, having sown seeds of the credit crisis that began in 2007 and exploded in 2008.

Will we be saying the same about American government should Aug. 2 come and go without a deal to raise debt ceiling?

Inquirer Columnist
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Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at

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