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
Warren mentioned something about the National Debt and the assets under management in pension funds.
ReplyDeletehttp://research.stlouisfed.org/fredgraph.png?g=mvV
Now, isn't that interesting.
National "Debt" ~= Private Pensions under fee-based "management"
ReplyDeletegosh, MTI
what if everyone with private assets to manage finds out that no one NEEDS Wall St advisers?
or Obama either?
what if we just quit grossly over-taxing labor with FICA/medicare/medicaid, quit asking everyone to let Wall St "play" with all the demand-leakage liquidity ... and instead just kept all that diverted initiative INVESTED and at work, in the USA?
Gosh indeed. Maybe our national Adaptive Rate might turn positive again?
Stop the Stupid?
ReplyDeleteIt's that simple?
Why did the moronic electorate keep listening to orthodox economist propagandists paid by rich lobbyists?
I dunno. On the hope that it'd feel SO GOOD when we finally stop?
Are we afraid of the pleasure of success? It's all because of the Protestant ethic? Orthodox economics represents the wages of sin? We're flagellating our culture with OE Whips?
No matter how you slice, dice or excuse things. We can do better ... if we just stop all the stupid.
http://research.stlouisfed.org/fredgraph.png?g=mvV
ReplyDeleteNow, isn't that interesting.
Maybe. How to interpret it?
Here's the info on what it's drawn from:
ReplyDeletehttp://goo.gl/5BBLZv
but as Warren & Roger say, looks like pretty good evidence of demand leakage that correlates closely with the National "Debt".
National "Debt" ~= Private Pensions under fee-based "management"
ReplyDeletegosh, MTI
what if everyone with private assets to manage finds out that no one NEEDS Wall St advisers?
Pension funds don't hold jst tys, Looks to me like the chart is fed debt and total asset level. Total asset level includes a lot more asset classes than fed debt.
Right, and those other assets get switched around from time to time. I wonder how long it takes that cash flow to turn into T-securities, on average.
ReplyDelete