Deficit Deal Is Bad For Growth And Stocks

Since both the Chamber of Commerce and most of Wall Street are strongly urging political leaders to raise the debt limit and avoid a U.S. default, it is likely---but not absolutely certain----that this will happen.  Political leaders of both parties realize that defaulting would be a global disaster, and Speaker Boehner today indicated that he can bring enough House Republicans to vote for some sort of compromise even though some members may vote against it.     The way events are shaping up, however, it is highly possible that an agreement to raise the debt limit will include provisions calling for significant near-term cuts in spending that will further impede an already weakening economy.