Friedberg @ 00:39:49Right
politicseconomy
In the June 2023 U.S. debt‑ceiling episode, Congress will ultimately reach a last‑minute deal that extends the debt ceiling, includes some spending‑cut concessions for Republicans, and avoids a U.S. default on its debt.
No, I think it's going to be a pretty...straightforward deal where they're going to it's going to come down to the wire. But my guess is no one's going to want to default on the debt and there's going to be some concessions on spending. And ultimately the debt ceiling will get extended, and that those concessions on spending will allow the Republican Party to save face with their voters and say, look, we we got some concessions here.View on YouTube
Explanation
The prediction matches what actually happened in the 2023 debt‑ceiling standoff:
- Last‑minute deal: Negotiations went down to the wire. Treasury moved the projected default "X‑date" to June 5, 2023, giving Congress only a few extra days. Congress then passed the Fiscal Responsibility Act of 2023: the House on May 31 and the Senate on June 1, just days before that X‑date, with the bill signed shortly thereafter—widely described as a last‑minute resolution that avoided default. (cnbc.com)
- Debt ceiling extended/suspended: The Fiscal Responsibility Act suspended (functionally, extended) the debt limit until January 1, 2025, explicitly to avert a default in June 2023. (nlc.org)
- Spending‑cut concessions for Republicans: The law included Republican‑sought fiscal restraints: caps on growth of discretionary spending for two years, clawbacks of unspent COVID funds, reductions in IRS funding, and added work requirements for some safety‑net programs—exactly the kind of spending concessions House Republicans had demanded and then claimed as a victory. (nlc.org)
- No default occurred: Because the deal was enacted before the June 5 X‑date, the U.S. did not default on its debt in 2023. Analyses of the episode explicitly describe the act as having avoided default by suspending the ceiling through 2025. (aha.org)
All key elements of Friedberg’s forecast—last‑minute timing, extension/suspension of the ceiling, Republican‑friendly spending concessions, and avoidance of default—were borne out, so the prediction is right.