The biggest missteps of 2011.
“Stupid.” “Like a banana republic.”
Those are a few of the choice words investors used to describe Congress’ behavior during the debt ceiling debate.
Some members of Congress were willing to risk letting the country default rather than borrow more money. The country needed cash to pay bills from policies that had already been authorized by…well, Congress.
Their principle was noble — the United States can’t borrow indefinitely. But to not raise the debt ceiling would have meant cutting spending drastically, upending the economy. That, in turn, would worsen deficits as tax revenue fell.
Congress came through in the end — barely — but the bickering led to the loss of the country’s prized AAA credit rating. — Jeanne Sahadi