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Will the US debt ceiling be raised by the end of May 2023?
189
resolved Jun 1
Resolved
NO

Experts and government sources agree that the "x date" where the US government cannot pay what it owes without raising, abolishing or circumventing the debt ceiling is coming up in the coming months.

At the time of writing, Manifold users agree that the debt ceiling will amost certainly be raised - see /jack/will-the-us-debt-ceiling-be-raised

This is one of a series of markets as to when in 2023 (if at all) the debt ceiling will be raised:

/SimonGrayson/will-the-us-debt-ceiling-be-raised-4dfbab873f7b

/jack/will-the-us-debt-ceiling-be-raised-bb50b544604c

/jack/will-the-us-debt-ceiling-be-raised-61f1f8a13eb3

/SimonGrayson/will-the-us-debt-ceiling-be-raised-6aa9483db108

/SimonGrayson/will-the-us-debt-ceiling-be-raised-5ce35cf731f8

/SimonGrayson/will-the-us-debt-ceiling-be-raised-ca2e2f5724f5

/SimonGrayson/will-the-us-debt-ceiling-be-raised-3d5bcf7c60a2

/SimonGrayson/will-the-us-debt-ceiling-be-raised-9a9422678ab4

/SimonGrayson/will-the-us-debt-ceiling-be-raised-fcb9293c90bc

(Manifold have added a M$10,000 liquidity subsidy to the June market as part of adding it to the Manifold showcase so there's a big profit to be made there if you think that the odds are wrong!)

If the debt ceiling is raised or abolished (ie. raised to infinity), this market resolves to YES.

If the debt ceiling is circumvented (eg. by minting a trillion dollar coin) or the government decides to ignore it and continue issuing debt past the debt ceiling limit, that does not count as raising it.

If the government hits the debt ceiling, circumvents it or defaults on the debt but still raises the debt ceiling by the end of May, this market resolves to YES.


Update 31st May - just to clarify a couple of points which have been discussed in the comments:

  • "By the end of May" means before the end of 31st May, Washington DC time. So if the bill currently being discussed is passed by the House and Senate and is signed into law by the President by 23:59 on 31st May, this would resolve to YES.

  • Under the current plan, the debt ceiling will be suspended until January 2025 (rather than being raised to a specific figure) as part of Fiscal Responsibility Act of 2023. This would count as being "raised or abolished (ie. raised to infinity)" as per the wording of this market.

I've also put up a few markets on what happens next with the Fiscal Responsibility Act:

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-c92aa58d0186

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-94efb856d92a

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-19de3ce890f7

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-c597c4aa7e4b

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-d229c4a1edca

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-2d2c27b34f65

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-6160f1d68aba

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-ee0f36977d4f

/SimonGrayson/bidenmccarthy-debt-ceiling-deal-wil-764c416156e8

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ChristopherRandles avatar
Christopher Randles

"In the deal reached on Sunday, they have not raised the limit to a certain level, but suspended it entirely until 2025."

https://www.bbc.co.uk/news/world-us-canada-65744615

Is that suspension rather than raising the limit?

Does it fall into

"If the debt ceiling is circumvented (eg. by minting a trillion dollar coin) or the government decides to ignore it and continue issuing debt past the debt ceiling limit, that does not count as raising it."

It doesn't really seem the same as either abolishing it or ignoring it.

SimonGrayson avatar
Simon Graysonpredicted NO at 3% (edited)

@ChristopherRandles Yes - a suspension where the government can borrow above the current debt limit absolutely counts.

If they pass this and the debt limit is suspended/abolished for two years then this resolves to YES.

NiallWeaver avatar
Niall Weaverpredicted NO at 3%

@SimonGrayson Essentially debt limit becomes temporarily infinite

Svenbonne avatar
Svenbonnesold Ṁ996 of NO

From what I can tell it is still possible: https://www.nytimes.com/2023/05/27/us/politics/debt-ceiling-deal.html

White House and G.O.P. Strike Debt Limit Deal to Avert Default
White House and G.O.P. Strike Debt Limit Deal to Avert Default
With the government on track to reach its borrowing limit within days, negotiators sealed an agreement to raise the debt ceiling for two years while cutting and capping certain federal programs.
Hamm avatar
Hammpredicted YES at 6%

it's already over at this point; there's not enough time for it to move through the house and the senate by the end of wednesday. even a 6% chance is much too high. I'm selling everything and accepting the big loss 😔

SimonGrayson avatar
Simon Graysonpredicted NO at 7%
Gen avatar
Genzybought Ṁ200 of YES

This market is predicting <10% chance that they vote & pass it on Wednesday? I'll take those odds

31st of May conclusion

BTE avatar
Brian T. Edwardspredicted NO at 13%

@Gen you are forgetting the Senate which will take another day. Plus there is no urgency for June 1 deadline anymore.

SimonGrayson avatar
Simon Graysonbought Ṁ370 of NO

@BTE Can they vote on it on the same day?

This seems like the kind of thing they should get a move on with rather than waiting until the next day…

BTE avatar
Brian T. Edwardspredicted NO at 13%

@SimonGrayson They won't because the Senators will each want to have their chance to speak on the floor excoriating the lower house blah blah blah. Liberal democrats could still kill this compromise in the House. Unless there is a hard deadline of the end of May it is not happening that fast. June 5th gives them plenty of time to put on a show.

MP avatar
MPpredicted NO at 12%

@BTE also, Dark Brandom doesn't have to sign it into law until May 31st. He may have other stuff to do and wait until Yellen is yelling that she has no money

SuperTaxGenius avatar
Super Tax Geniuspredicted NO at 5%

@Gen At least one Senator is planning on delaying it with procedural hurdles.

Nearly impossible for this to make it through the Senate in less than 2 days.

MP avatar
MPpredicted NO

@MP https://twitter.com/TheStalwart/status/1664753620464574466?t=Ta8_qlt6oe_fon5DGm2AKA&s=19

Literally what I said. Dark Brandon is taking his time to sign the Fiscal Responsável Act of 2023. Even if congress was super quick, in the absence of the X Date, nothing guaranteed the debt ceiling would be raised.

BTE avatar
Brian T. Edwardspredicted NO at 15%

https://youtu.be/cXFOxT6Graw

McCarthy says House will vote on Wednesday to raise the debt ceiling
McCarthy says House will vote on Wednesday to raise the debt ceiling
House Speaker Kevin McCarthy said the text of the debt ceiling agreement will be available to lawmakers on Sunday and the House will vote on it on Wednesday.…
Gabrielle avatar
Gabriellesold Ṁ166 of YES

@ShadowyZephyr McCarthy has pledged 72 hours until the House votes, which gives only a day for it to be passed, pass the Senate, and be signed into law.

Gabrielle avatar
Gabriellebought Ṁ1,000 of NO

Their work is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

ShadowyZephyr avatar
ShadowyZephyrbought Ṁ40 of YES(edited)

@Gabrielle Hmm, actually, IDK, if the date of default is June 1 then it will push through, but if it's June 5, who knows...

Gabrielle avatar
Gabriellebought Ṁ244 of NO

@ShadowyZephyr Yeah, I think they would rush it through if June 1 were the real deadline, but McCarthy has to worry about being removed from being Speaker, since just one Republican’s vote can do it. So there will probably be enough posturing to make it get closer to the deadline than the end of May.

BTE avatar
Brian T. Edwardsbought Ṁ100 of NO

@Gabrielle It’s not happening in May. Don’t forget about the day + it will take the Senate to vote on it.

Hamm avatar
Hammpredicted YES at 20%

1 in 5 seems about right at this point, idk. I'm in it till the end

MP avatar
MP

Janet almost rug pulled me. Luckly I was in front of the terminal when this news hit the tape and opened MM to zero my position.

Kudos to @jack that was pounding the table in a June 6th X-Date

BTE avatar
Brian T. Edwardsbought Ṁ100 of NO

My trades are not registering correctly or aren't moving the probability at all.

GaryGrenda avatar
Gary Grendapredicted NO at 18%

@BTE even that will be pushed back if need me. The best experts on this are saying the govt likely has until August.

BTE avatar
Brian T. Edwardsbought Ṁ100 of NO(edited)
MP avatar
MPpredicted YES at 38%

Speaker McCarthy said he is very confident the U.S. will avoid a default

belikewater avatar
belikewaterbought Ṁ300 of YES

For the US to avoid default by raising the debt ceiling, this pretty much has to get done by May 31. I think this is the most likely outcome, but other outcomes are certainly possible.

jack avatar
Jackbought Ṁ50 of NO

@belikewater I don't think that's true, I would bet against that. I opened a question for it (actually two, one conditional and one not):

GaryGrenda avatar
Gary Grenda

@belikewater what is our definition of default? Misses a payment on debt issued correct? That won't happen, ever. If the debt ceiling isn't raised the national budget simply must come into balance. The govt is well prepared for this and it's public info their plan.

belikewater avatar
belikewaterpredicted YES at 71%

@jack In my comment, I wrote, "For the US to avoid default by raising the debt ceiling, this pretty much has to get done by May 31." Of course, there are other paths that could be pursued to avoid default. I have several trades placed on different potential outcomes; this is my trade betting on what I currently think is the most likely outcome, which is that the debt ceiling is raised in time to prevent default.

belikewater avatar
belikewaterpredicted YES at 67%

@jack It's actually surprising to me that this market stayed under 50% for so long and that it's still only at a 2/3 probability.

jack avatar
Jacksold Ṁ115 of YES

I know, but I highly doubt that the default will be avoided by a different path, as per https://manifold.markets/jack/will-the-us-raise-the-debt-ceiling. I didn't think it was worth opening joint/conditional markets on it since it's already so low.

Will the US avoid default by raising the debt ceiling?
Will the US avoid default by raising the debt ceiling?
91% chance. The US has already hit the debt ceiling in Jan 2023 and the Treasury department is using accounting maneuvers to keep paying the bills with so-called “extraordinary measures” (1), which are expected to run out in the summer. At that point, if no action has been taken, the US government w…
jack avatar
Jackbought Ṁ100 of YES

@belikewater This market is pretty well agreeing with real-money prediction markets https://kalshi.com/markets/dceil/debt-ceiling-hike, which have basically stayed in the 40-50% range in the last 2 weeks.

belikewater avatar
belikewaterpredicted YES at 51%

@jack The only way I can reconcile these 2 markets is with the idea that the markets must think that the debt ceiling must be raised by sometime ON June 1 for default to be avoided by raising the debt ceiling. My thinking has been that the debt ceiling must be raised BEFORE June 1 for default to be avoided by that mechanism. Perhaps I'm wrong.

jack avatar
Jackpredicted YES at 56% (edited)

@belikewater The markets don't think that the deadline is June 1 (none of the ones I've been watching anyway, do you have a link?). A lot of media reporting has been misstating that deadline. Yellen has consistently been using the wording of likely early June, and potentially as early as June 1. Here is her last update from May 22 https://home.treasury.gov/news/press-releases/jy1497

With an additional week of information now available, I am writing to note that we estimate that it is highly likely that Treasury will no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1. 

I highly doubt the X-date will come on June 1 (<5%), but even a few percent chance of catastrophe is really bad and should be avoided, obviously. I expect >50% chance by June 15.

There was more discussion about this in https://manifold.markets/SimonGrayson/will-the-us-debt-ceiling-be-raised-6aa9483db108.

Secretary of the Treasury Janet L. Yellen Sends Letter to Congressional Leadership on the Debt Limit
Secretary of the Treasury Janet L. Yellen Sends Letter to Congressional Leadership on the Debt Limit
Today, U.S. Secretary of the Treasury Janet L. Yellen sent a letter to all members of Congressional leadership regarding the debt limit. The full text of the letter can be found here and is available below. The Honorable Kevin McCarthy Speaker U.S. House of Representatives Washington…
belikewater avatar
belikewatersold Ṁ305 of YES

@jack I was interpreting that "as early as June 1" as the date everyone would want to avoid. In any case, the question is now moot, as Yellen has come out and said it's June 5.

SimonGrayson avatar
Simon Graysonpredicted YES at 41%

One week to go and this has been trading between 30% and 50%.

It's going to be a rollercoaster final few days and it looks like this could swing quite dramatically from hour to hour. I'm really interested to see whether this market will be able to tell us more than the news can!

MP avatar
MPpredicted YES at 36%

@SimonGrayson holding YES here seems a no-brainer, the volatility will give us the chance to exit at higher odds

MP avatar
MPpredicted YES at 38%

@MP lol, 7% already

LevMckinney avatar
Lev Mckinneybought Ṁ35 of NO

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