Until today, we’ve been confident that we could avoid a double-dip recession.  Too be sure, we’ve acknowledged that risks abound, particularly in the Middle East and in the Eurozone.  However, the recovery seemed to be proceeding about as we had expected, slowly, certainly slower than most forecasts.

We believed that the United States economy, absent some outside shock, would slowly accelerate.

Today, we’re not so sure.  As Dan says, “Today, we know more about the truth.”

We have to run the new data through our model to be precise about the prospects for a new recession, and we’ll be doing that soon.  In the meantime, you have to believe that this is a very risky time for our economy.

This should cause Washington to be more determined to extend the debt ceiling.  Perceptions of the risks of a new recession have increased.  That makes it more likely that Washington will be blamed if they do not raise the debt ceiling.