The biggest threat to the U.S. economy? Washington dysfunction

  @FortuneMagazine October 31, 2013: 6:46 AM ET
CAS18 capitol building
(Fortune)

Shortly after the federal government reopened and the debt-ceiling standoff was temporarily resolved, a European friend -- an admirer of the U.S. -- asked me plaintively, "What is going on over there?" What indeed? I was tempted to say it was just another bout of partisan squabbling that didn't signify much. In the markets there was no "debt crisis." The yield on very short-term Treasuries (the ones due to be repaid immediately) spiked. But the benchmark 10- and 30-year issues barely budged, and stocks stayed close to all-time highs. Investors never believed a debt default was a serious possibility, and they were right. Despite all that, we can't afford to ignore what's happening in Washington. Political dysfunction now represents the biggest threat to the U.S. economy. However you look at it -- short term, medium term, or long term -- the gridlock is crimping growth and undermining the country's prospects. Worst of all, there's no end in sight.

Join the Conversation
CNNMoney Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.