Republicans Are Playing Chicken With A Surprisingly Resilient Economy

Republicans in the House of Representatives are holding the federal government’s ability to pay its bills hostage to enact draconian cuts to a wide range of programs related to health care, science, housing and food security. The U.S. Treasury Department now warns that the federal government may be unable to pay all of its bills as early as June 1. The economy could suffer substantial losses if Congress fails to give the government the ability to make good on its past promises and pay what it owes to people and businesses.

The economy has so far proven to be remarkably resilient in the face of significant headwinds, most notably higher interest rates and heightened uncertainty over the political debt standoff. The Bureau of Economic Analysis reported that the economy grew at an annual rate of 1.1% in the first three months of this year than in the prior three months. Digging just a little bit below the surface shows an even stronger and strengthening economy – for now, at least. Most notably, households and businesses seem to be taking a longer term view, reflected in where they spent their money. This best illustrates the current resilience of the economic recovery.