White House economic adviser Austan Goolsbee warns of "catastrophic" consequences if the new...


White House economic adviser Austan Goolsbee warns of "catastrophic" consequences if the new Republican majority in the House follows through on threats to reject an increase in the U.S. debt ceiling. "If we hit the debt ceiling, that's... essentially defaulting on our obligations... a worse financial economic crisis than anything we saw in 2008."
Comments (18)
  • 7footMoose
    , contributor
    Comments (2229) | Send Message
     
    What would you expect him to say?
    "Gee, let's cut the budget and all of the expensive programs of the President and the Liberals that we use to bribe people to vote for Democrats."
    I don't think you will ever hear any Politician say that.
    3 Jan 2011, 09:54 AM Reply Like
  • jpiretti
    , contributor
    Comments (705) | Send Message
     
    As you can see from the debt chart, we know who was responsible. Including interest on the debt, Reagan,Bush 41 and Bush 43 account for over 11T of the 14T. Where have you been since 1981?
    en.wikipedia.org/wiki/...
    3 Jan 2011, 10:47 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6356) | Send Message
     
    It's comforting to know that the new year has also ushered in a new moderate tone out of the White House along with a spirit of compromise.
    3 Jan 2011, 09:54 AM Reply Like
  • kmi
    , contributor
    Comments (4579) | Send Message
     
    Meh, reality and history will both prove that a "spirit of compromise" was the reason for Obama's fall, hardly the opposite.

     

    That said, if Reps and Dems both show up looking for a fight, it'll be middle America taking it on the chin. As usual.
    3 Jan 2011, 12:21 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (4364) | Send Message
     
    Why even have a 'debt ceiling' in the first place? Has it ever been a real ceiling for our debt? They just raise it every time the previous 'ceiling' is reached.
    3 Jan 2011, 10:02 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2229) | Send Message
     
    Probably because when this was first discussed by more responsible government officials, it was considered to be a "hard" number not to be exceeded and only used in an emergency. Oh, but then it became the narcotic of the Congress which uses it to garner ( aka, BUY ) votes.
    3 Jan 2011, 10:06 AM Reply Like
  • zorrow
    , contributor
    Comments (2568) | Send Message
     
    I say let the Republicans be Republicans. Their "I've got mine, screw you attitude" will lead to a very short lived ascendance. They'll be gone, like a bad dream or a plague of lousts by 2012.
    3 Jan 2011, 10:03 AM Reply Like
  • kmi
    , contributor
    Comments (4579) | Send Message
     
    And so will a huge chunk of middle Americas wealth as they funnel it to the oligarchs.

     

    We need a new set of criminals in politics like we need another Katrina.
    3 Jan 2011, 12:23 PM Reply Like
  • Stoploss
    , contributor
    Comments (1713) | Send Message
     
    At 14 T the debt "ceiling" is non material. Might as well be 20.. But the show must go on. I guess the sheep think this is an important topic. In case anyone forgot, (this "market") cannot continue it's ascent without the debt ceiling climbing along with it as well. Careful what you wish for, cap the debt ceiling and that caps the "market".
    3 Jan 2011, 10:37 AM Reply Like
  • Neil459
    , contributor
    Comments (2636) | Send Message
     
    Lets just remove the BS, you know, the Democrats did it, the Republicans did it, etc. Just stop spending money we do not have! There is no reason to treat government spending any different than individual spending. When times get tough you don't go out and spend more and neither should the government. Period.

     

    Anything else is gobbledygook masquerading as economic theory to support income redistribution and vote buying.
    3 Jan 2011, 10:54 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    "When times get tough you don't go out and spend more and neither should the government."

     

    To the contrary, when you're going under anyway, you just borrow as much as you can for one last fling.:-(
    3 Jan 2011, 11:42 AM Reply Like
  • zorrow
    , contributor
    Comments (2568) | Send Message
     
    I guess with reading the Constitution and everything, soneone might stumble on the fact that there has been no declaration of war since WWII. I wonder what all the fine hypocrites will do about that.
    3 Jan 2011, 11:22 AM Reply Like
  • kmi
    , contributor
    Comments (4579) | Send Message
     
    There have been no wars, it's all police action and training excersizes, you must be new!
    3 Jan 2011, 12:25 PM Reply Like
  • User 487974
    , contributor
    Comments (1101) | Send Message
     
    F-YOU ! Lightbulb head. You Lie!
    3 Jan 2011, 01:55 PM Reply Like
  • zorrow
    , contributor
    Comments (2568) | Send Message
     
    Have you taken all your meds? I worry.
    3 Jan 2011, 02:51 PM Reply Like
  • Swass
    , contributor
    Comments (419) | Send Message
     
    I love how liberal economists have only two options. Raise taxes more, or raise the amount we can borrow. How about the third option: Massively reduce spending to show everyone we can be trusted with the credit card when we use it (which has been all the time, lately).

     

    However, if the spending cannot voluntarily be stopped, then not increasing the debt ceiling would force them to make those cuts.

     

    Ever remember Nancy Peloci's speech: “After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,”. Hmm. What ever became of that? Perhaps the only way to prevent them from spending is to not fund the government.
    3 Jan 2011, 02:11 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    It should be interesting to watch the Sovereign CDS rates changes over the next few months. With the Federal Reserve monetizing over 1/3 of US debt, the United States is already in trouble. In the event that a default were to occur, more likely deferred or delayed payment than outright failure to pay, then I don't think it matters who to blame.

     

    I would suggest watching what Pimco do during the next few months. If there seems to be any trouble ahead for US Treasuries, they would be one of the first to make moves. The other issue is that the US Dollar would drop relative to other currencies, which could make investments in foreign stocks more favorable.

     

    I don't particularly care who wins in the Republicans vs. Democrats game, but history has shown that politicians can have adverse affects on stock markets due to their actions. Regardless of outcome, this issue is definitely one to watch over the next few months.
    3 Jan 2011, 02:14 PM Reply Like
  • zorrow
    , contributor
    Comments (2568) | Send Message
     
    One man's "adverse reaction" is a hedge funds gain.
    3 Jan 2011, 02:52 PM Reply Like
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