The GOP Agenda Includes a Global Financial Crisis

Catherine Rampell says Kevin McCarthy’s threat to hold the debt ceiling hostage if Republicans win control of the House could lead to a global financial crisis.

“If lawmakers dine-and-dash on behalf of Uncle Sam, they tarnish the creditworthiness of the United States and can make it more expensive for the federal government to borrow in the future because investors don’t trust us. Worse, they might accidentally blow up every other financial market on Earth, too.”

“That’s because U.S. debt is now viewed as the safest of safe assets. Virtually all other assets around the world are benchmarked against U.S. Treasury securities. If we default on our debt obligations — or even come close to default — that raises the question of the riskiness of everything else investors buy and can send shockwaves of panic through every other market.”

Contrary to GOP messaging, the debt ceiling is not about excessive spending. It’s about paying for what’s already been spent.