Governments are living in a fiscal fantasyland
The world over, they are failing to confront the dire state of their finances
Wrangling over budgets is always part of politics, but today’s fiscal brinkmanship is truly frightening. In America Democrats and Republicans are playing a game of chicken over raising the government’s debt ceiling. As the drama intensifies, the stakes are getting dangerously high. Janet Yellen, the treasury secretary, says her department could run out of cash to pay the government’s bills on June 1st if no deal is struck. Investors are beginning to price in the risk of what would be America’s first-ever sovereign default.
This article appeared in the Leaders section of the print edition under the headline “Stuck in fiscal fantasyland”
From the May 6th 2023 edition
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