The debt ceiling has been raised to get us thru 2013.
The spending cuts are back ended and will be felt mostly in 2014 (which is obviously one year later than the debt ceiling increase.)
What makes everyone certain that the debt ceiling will not need to be extended in 2014? Hope ?
If the debt ceiling needs to be extended again in 2014 because the economy is still a wreck, we are going to have to ‘up’ the spending cuts more than what is planned NOW and/or raise taxes more than we anticipate now….or raise the debt ceiling again. That will really hurt – hurt more than anyone is talking about now. Currently the expected spending cuts are based on the debt ceiling established today — not a higher one later.
If the economy takes off between now and 2014, all is well since we will not have to then extend the debt ceiling in 2014.
But if the economy remains sluggish (and economists have been forecasting recently a very, very, very slow recovery), we have more problems at a multiplied level.
Of course the above takes America past an election to the advantage of all incumbents in both parties.
What do you think?
And am I wrong? If so, please post why I am wrong.