Federal outlays are likely to exceed receipts by around $500bn (2.2% of annual GDP) in total over October and November. If Congress fails to raise the limit, the Treasury would need to reduce outlays by that amount, a reduction of more than 40%. Absent an immediate resolution, the US - already addicted to trillions in government transfer payments - would quickly spiral into a consumer-led depression. https://www.zerohedge.com/markets/goldman-sounds-red-alert-over-debt-ceiling-upcoming-deadline-looks-risky-2011-debt-limit
Assuming that this scenario is avoided by the Democrats passing a massive stimulus bill, then stagflation phase 1 will kick in, similar to the period of 1965-1968. https://www.zerohedge.com/markets/stagflation-phase-1-begins-democrats-scramble-pass-largest-fiscal-stimulus-all-time
I like trying to find historical analogies. Is Biden like Johnson? Not in the sense of mental acuity, but in the sense of what he is doing to the economy by causing stagflation, which cursed this country from the late 1960 until 1980 when Paul Volcker killed it with shock therapy, which caused a depression.
This seems on point: "How bad was the period of the Great Inflation? The inflation rate, a mere 1 percent in 1965, hit 14 percent by 1980. Unemployment trended up from a low of 3.5 percent (annual average) in 1969 to 9.7 percent in 1982. The stock market was in the dumps. Oil prices jumped off the charts. Presidents Richard Nixon and Jimmy Carter became desperate enough to tinker with price controls, the results being disastrous." https://www.stlouisfed.org/publications/regional-economist/january-2005/volckers-handling-of-the-great-inflation-taught-us-much
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