When the blockbuster movie Gravity opens, astronaut Dr. Ryan Stone (portrayed by Sandra Bullock) is safely tethered to her space station. In a matter of minutes, she is in danger of being hit by huge flying chunks of space debris.
Seeing the movie, I realized Dr. Stone’s fictional situation was an apt metaphor for the very real looming debt-ceiling crisis. Our political leaders are about to untether the nation from its commitment to pay its bills, and to borrow to meet fiscal responsibilities. If Congress refuses to raise the debt ceiling, our still recovering economy may soon be sent careening into the pitch black space of financial default.
Dr. Stone’s life threatening space debris was the result of a man-made mistake; likewise, allowing a debt ceiling crisis to happen would be a self inflicted wound. Still, some in Congress insist the U.S. Treasury has plenty of money on hand, enough to ride out any financial turbulence. President Obama and other international leaders have issued urgent warnings—noting that the U.S. would go into a deep recession within two months, and global money markets would take a devastating hit. More, economic experts and money market insiders, who typically speak in gray, staid terms, are voicing their concerns in red light alarm warnings.
“Let us be perfectly clear," wrote the team from RBC Capital Markets, “crossing the debt ceiling would be catastrophic.”
Even with so much at stake, the broad attention on the government shutdown has marginalized the debt-ceiling crisis.
By now you’ve heard the stories of people suffering because the government shutdown- the new war widows whose eliminated death benefits prevent burying their loved ones, and the poor whose fuel subsidies have been cut off, just as the weather turns colder.
Expect more widespread and deeper pain with a debt ceiling postponement as recipients of social security, Medicare, disability and military benefits, and retirees may not get their checks.
And time is running out. The stock market and other institutions are already reeling from the threat of a crisis. Later this week, all extraordinary measures to keep Treasury payments on track will end. Experts predict doomsday will arrive sometime before November 1.
Gravity’s Dr. Ryan races the clock, trying to save her life; she knows she has limited oxygen. Washington lawmakers don’t seem to get the life and death consequences for political posturing and delay. I’m holding my breath for a last minute reprieve.