US Debt Ceiling Thought Du Jour
So, apparently the Financial Times has run an article discussing the consequences of a ratings downgrade if the U.S. defaults on an interest payment as a result of Congress’ inability to reach a compromise on how to manage the national debt.
The article reports that the increase in interest rates will likely lead to immediate drop in the market value of bonds in investors’ portfolios to the tune of up to $100 billion, and that the U.S. can expect to be liable for $2-$4 billion annually in additional interest payments on the national debt.
Despite what it will sound like further on in this post, if finger-pointing must be done, both donkeys and elephants deserve blame for the mess, as does the American public in general for re-electing these jokers every 2 or 6 years.
I respect the efforts of the GOP to stick to their guns on their insistence that the federal government rein in its spending to sustainable levels. As someone who’s not a fan of taxes, I appreciate their efforts to take federal revenue increases off the negotiation table.
However, there is a time to fight for ideals, and there is a time to be practical. Practicality and realism are called for when fighting for your ideals is on track to be counter-productive.
In this case, protecting investors from tax hikes leading to a $100b decline in the value of investors’ portfolios, as well as the fight to cut spending leading to additional multi-billion dollar annual obligations both seem…well, dumb.
I admit there is plenty in politics that seems dumb when viewed from outside the Beltway, but perhaps this is a time when our legislators ought to quit wallowing in idiocy and find a way to make things work?
