The Weekly Wire: What's Behind Door #3?

“What’s behind door number 3?” is a question very familiar to fans of the long-running TV game show “Let’s Make A Deal.” Well, maybe to fans of a certain age as it seems the latest incarnation of the show has moved on from doors to curtains. Most of my viewing of LMAD took place during the 1970s when the show’s original host and co-creator, the late, great Monty Hall, was handling the hosting duties. For those who enjoy probability puzzles, there is a well-known brain teaser called “The Monty Hall Problem,” which is loosely based on the TV show.

This week, the focus shifts to the recent news that Democrats and Republicans reached an agreement to raise the U.S. debt ceiling into December—hence the reference to Let’s Make A Deal. Specifically, the Senate agreed to raise the U.S. borrowing limit by $480 billion, which is the amount the Treasury Department has said is needed to meet the country’s cash needs until December 3rd. The bill now goes to the House, where it is expected to pass, and then to the White House for President Biden’s signature.

This is only a temporary solution to the debt ceiling issue, and the path forward from December 3rd remains unclear. Republicans continue to argue that Democrats should use the budget reconciliation process to raise the debt ceiling, while Democrats argue that the reconciliation process is too risky and time-consuming for this purpose. As a result, there is a good chance the issue will resurface in two months’ time.

For now, investors appear to be welcoming the deal, as stocks rallied during the first full week in October after a difficult September. The market dislikes uncertainty, and at least for the next few months, there is some certainty regarding the government’s ability to pay its bills.