Economists of all political persuasions have warned that a failure to raise the debt ceiling by the Treasury’s deadline of Oct. 17 could be catastrophic. The world economy’s faith in the safety of Treasury debt would be shaken for years. Interest rates could shoot up, and stock prices worldwide would most likely plummet. “Defaulting on any obligation of the U.S. government would be a dangerous gamble,” Doug Elmendorf, the director of the nonpartisan Congressional Budget Office, told the House Budget Committee on Thursday. “In a very uncertain world, the one thing everyone has been able to count on is that the U.S. government will pay its bills on time.” But many House Republicans put little stock in such pronouncements. “Economists, what have they been doing? They make all sorts of predictions,” said Representative John Fleming, Republican of Louisiana. “Many times they’re wrong, so I don’t think we should run government based on economists’ predictions.” Here comes my favourite part: “People have to recognize there’s never any compromise until the stakes are high,” said Representative Dana Rohrabacher, Republican of California. “In our society, that’s the nature of democratic government.”
Posted on: Fri, 27 Sep 2013 08:39:36 +0000
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