July 1, 2011
At the Bipartisan Policy Center, we have just released an independent analysis of the “on the ground” facts associated with a failure to raise the debt limit by August 2, the projected date after which the government will be unable to meet all of its spending obligations. We have tried not to understate or overstate the risks. We provide no rhetoric, no political advice and no instructions to participants in the discussion, but rather our analysis.
While we are also not in the business of making economic forecasts, our analysis is broadly consistent with that of Mr. Zandi.
Using publicly available data, we looked at daily cash flows for the federal government going back several years. Based on this data, the government will run short of cash on August 3. There is little doubt about this time frame. Those who speculate that the date will be much later, or that Treasury has a secret bag of tricks, are simply mistaken.
Read the full op-ed here
Economic Policy Project