April 20, 2011 5 Comments
Haven’t written much about the debt ceiling because I haven’t had much to offer beyond just repeating what Ezra and company are saying. That said, what Ezra is saying is really important, and thus well worth emphasizing here:
At least, it [Michelle Bachman's plan to not raise the debt ceiling] makes perfect sense unless you, like me, had spent the previous few days talking to economists, investors and economic policymakers about what could happen if we start playing games with the debt ceiling. Their answers were across-the-board apocalyptic. If the U.S. government is so incapable of solving its political problems that it can’t come to an agreement on the debt ceiling, they said, that’s basically the end of the United States as the world’s reserve currency. We won’t be considered safe enough to serve as the investment of last resort. We would lose the most important advantage our economy has in the global financial system — and we’d probably lose it forever. Skyrocketing interest rates would slow our economy and, in real terms, make it even harder to pay back our debt, which would in turn send interest rates going even higher. It’s an economic death spiral we associate with third-world countries, not with the United States. [emphasis mine].
Truly scary that we have elected members of Congress this stupid and reckless. And, for a little more value added, here’s a screen shot of Ezra reacting to Bachman’s “plan.”