CBO Warns of the Risk of a U.S. Fiscal Crisis

Nicola Moore / July 29, 2010

It’s difficult to forget the drama—including riots, fires, and even deaths—that unfolded during Greece’s recent fiscal crisis. But what would happen if bad budget policy led to a financial crisis in the United States?

A recent report from the Congressional Budget Office (CBO) points out the economic casualties of a fiscal crisis in the US would be devastating.

1. First, fiscal crises trigger significant spikes in interest rates, which devastated business investment and consumer spending alike. (more…)