Thankfully, the negotiated debt ceiling deal pushes the next debt ceiling deadline out to January 2025. The deal has seen complaints from both parties, which means it was probably a good compromise solution. Democracy is the politics of the half loaf; no one gets everything they want, particularly with both the Senate and House so evenly split between the parties.

Cooler heads prevailed and the debt ceiling deal passed both the House and Senate by large bipartisan margins. The margins were so large it gave political cover for members of the Freedom Caucus and progressive Democrats to vote against the measure – defeat could have caused not just the U.S. economy to collapse but the world economy as well. Such a decisive win also sends a signal of confidence that the United States is serious about paying its debts on time. Finally, the deal removed a big cloud of uncertainty for American businesses so they can plan for the next year and a half.

Despite economic pundits’ predictions, our economy has avoided a recession. It has weathered the debt ceiling crisis, regional bank turbulence, high inflation and rising interest rates. Maybe, just maybe, with the uncertainty out of the way, the Federal Reserve will be able to achieve the much talked about goal of a “soft landing,” obviating the need for large layoffs.

Sam Rosenthal
Portland

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