Looming U.S. Debt Ceiling could be a lot Worse

Tuesday’s government shutdown could be just the warm-up act.

The failure by Congress on Monday to renew the federal budget into a new fiscal year is expected to be followed in a few weeks—no one knows exactly when—by an even more dangerous stalemate over raising the government’s borrowing authority.

“You can only see an endgame that ends with one side or the other blinking, and it’s hard to predict who that will be,” Tony Fratto, a Washington consultant and former Treasury official, told CNBC. “They may not blink until after government has taken a day or two of not paying some bills—which some would consider a technical default.”


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