It looks like Congress will kick the can again, raising the debt ceiling and keeping the Government open.  That’s nice, since the failing to pay U.S. creditors is the equivalent of Russian roulette.  The potential consequences of default are difficult to imagine.  But if I had to imagine a scenario that could compare to the mortgage crisis, with all the unforeseen and little understood interrelationships, a Treasury default would be a good place to start.  So, that’s the good news. It looks like the risk of imminent crisis is diminished.

But kicking the can is not solving the underlying problem.  We have to contain our spending problem.  There is a tipping point, when servicing the U.S. debt crowds out our ability to fund programs we are accustomed to.  If Congress doesn’t take the initiative, the markets will do it for us.

Eventually interest rates will go up, and the cost of servicing our debt will grow even if we don’t raise the debt ceiling.