WASHINGTON — No matter how the debt crisis ends, the economy will probably take a hit. The question is how big.
Failing to raise the federal borrowing limit would force the government to slash spending immediately and possibly cause a default, frightening financial markets and sending interest rates up.
If Washington reaches a deal and does raise the limit, it will probably include long-term spending cuts. The cuts would withdraw government stimulus at a time of weak economic growth and damage the already feeble recovery, at least in the short term.