David Corn — Economist Mark Zandi on Default: "We Will Be Dooming Our Economy and the Entire Global Economy" For Years

McCain//Palin economic advisor Mark Zandi: "The point is that with each passing day the debt limit is not increased the more damage it will do to our economy. If lawmakers don’t raise the debt limit by November 1, the economy will fall back into recession. If they can't raise it by the end of November, we will be dooming our economy and the entire global economy to a wrenching economic downturn with implications for years if not decades to come."

Mother Jones
Economist Mark Zandi on Default: "We Will Be Dooming Our Economy and the Entire Global Economy" For Years
David Corn

Michael McAuliff — Debt Limit Showdown Could Be Catastrophic For Economy: Analysts

The House Republican plan to have showdowns over both funding the government and raising the nation's debt limit could have severe consequences for the overall U.S. economy, non-partisan analysts said Wednesday.

The concern surrounding a potential political fight over the country's borrowing cap next month was highlighted prominently by Moody's economist Mark Zandi, a former adviser to Sen. John McCain (R-Ariz.) who testified at a joint congressional hearing Wednesday on "The Economic Costs of Debt-Ceiling Brinkmanship.”

The debt limit, which stands at $16.7 trillion, authorizes the Treasury Department to pay for the spending that has already been authorized by Congress. Treasury officials warned in the spring that they had begun taking extraordinary measures to keep the government's bills paid, and would likely have to default on some payments in mid-October if Congress did not grant borrowing authority that equals the spending it has written into law.
Such a default would be devastating, Zandi warned.

"You need to raise the debt limit. There's no other option," he told lawmakers. "Otherwise, it's disastrous. It's counterproductive to your own goals because it's going to result in a recession, bigger deficits and raise the debt."....

Douglas Elmendorf, the head of the non-partisan Congressional Budget Office, warned that even posturing over a shutdown costs the government and the economy.... If the government closes, the economic impacts "scale up" quickly, he said.

Even the U.S. Chamber Of Commerce, generally an ally of the GOP, warned that failing to keep the government funded after Sept. 30 would be bad for business, as would a debt-ceiling standoff.

The Huffington Post
Debt Limit Showdown Could Be Catastrophic For Economy: Analysts
Michael McAuliff

Mark Zandi on 2012

• U.S. growth is accelerating as the year ends, but the economy's performance in 2011 was disappointing.

• Prospects are better for 2012, but only if policymakers in Europe and Washington address critical issues.

• Europe's current recession is expected to be mild, but the threat of a deeper downturn has financial markets nervous.

• Unless U.S. lawmakers act, federal fiscal policy will shave 1.7 percentage points from real GDP in 2012.

• Businesses will likely remain reluctant to invest and hire more aggressively until after the presidential election.

Read it at Moody's Analytics/Dismal Scientist

U.S. Macro Outlook 2012: Diminished Expectations
By Mark Zandi

(h/t Roger Erickson via email)