News Column

Debt Fight Spurs Fears of Another Great Recession

October 4, 2013

Baystreet Global Markets

Forget the current U.S. government shutdown. Economists say it's the upcoming debt ceiling impasse that could plunge the nation into a recession.

About half of the 22 economists surveyed say a recession will be unavoidable if Congress fails to raise the nation's debt ceiling before the Treasury runs out of cash later this month.

A couple more say a recession is possible, depending on how far past the deadline Congress goes before acting. And even those who aren't predicting recession say not raising the debt ceiling would be a very bad idea.

The economists agree the threat posed by not raising the debt ceiling is significantly greater than that posed by the federal government shutdown that started Tuesday. None predicted a recession being caused by the shutdown alone.

Even those economists who aren't predicting a recession are worried about the risks posed by the debt ceiling.

Some of the economists believe if Congress doesn't raise the debt ceiling then the administration will act unilaterally. That might cause a constitutional crisis but they believe it would avoid a financial crisis.

1998 - 2013 Media Corp. All rights reserved.

Original headline: U.S. debt fight could spark recession

For more stories covering politics, please see HispanicBusiness' Politics Channel

Source: © 1998 - 2013 Media Corp. All rights reserved.