3min chapter

Forward Guidance cover image

The Debt Ceiling Approaches | Joseph Wang & Dominique Dwor-Frecaut

Forward Guidance

CHAPTER

The Twilight Zone: A Political Channel for Negotiation

The government would have to operate a balanced budget for lack of cash. The 12-month deficit is 7% of GDP, which by the way is crazy considering that unemployment is at a 50-year-old. In this twilight zone, theGovernment would have to go from a deficit of 7%. And that would be enough for a recession. It's just like the government shutdown. I mean, they last a ridiculous number of days. Eventually, the two parties have to be brought together.

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