Posted on May 21, 2023
Here's what could happen in markets if the U.S. defaults. Hint: It won't be pretty
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https://www.npr.org/2023/05/21/ [login to see] /debt-limit-ceiling-default-wall-street-biden-mccarthy-economy
The deadlines! The arm-twisting! The threat of default!
The U.S. may be just days away from being unable to pay its bills, but Wall Street has seen this movie before, and markets seems unbothered — for now.
"One staffer on Capitol Hill likened this, the debt ceiling, to passing a kidney stone," says Libby Cantrill, the head of public policy at PIMCO, which manages some of the world's largest bond funds. "We all know it will pass. It's just a question of how painful it will be."
The deadlines! The arm-twisting! The threat of default!
The U.S. may be just days away from being unable to pay its bills, but Wall Street has seen this movie before, and markets seems unbothered — for now.
"One staffer on Capitol Hill likened this, the debt ceiling, to passing a kidney stone," says Libby Cantrill, the head of public policy at PIMCO, which manages some of the world's largest bond funds. "We all know it will pass. It's just a question of how painful it will be."
Here's what could happen in markets if the U.S. defaults. Hint: It won't be pretty
Posted from npr.org
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Posted >1 y ago
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PO1 William "Chip" Nagel as difficult as it is, we can’t remain in limbo forever, our representatives are there to vote for our best interests not to hit the market, line their pockets and sell off what’s plunging. We need a decision that includes the pay, care and benefits Veterans have already earned in blood.
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All the Republicans need do is follow their own lead. During the Trump administration, they raised the debt ceiling 3 times. No strings attached. Do this now!
Then discuss spending.
(The Republicans should pay attention to what happened to Newt Gingrich in 1995)
Then discuss spending.
(The Republicans should pay attention to what happened to Newt Gingrich in 1995)
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I read a lot from the Bipartisan Policy Center (https://bipartisanpolicy.org/) as they are one of the most centrist policy organizations I have found that is almost right down the middle when it comes to economic items (they are a bit center-left on energy and a bit center-right when it comes to Corporations though).
Jason Fichtner, the BPC's VP and Chief Economist, recently testified* before the Senate Committee on the Budget at which he gave three key points.
• First, Congress must raise the debt ceiling. Period. Full stop.
• Second, the nation’s debt is on an unsustainable trajectory and action must be taken now. Further delay will only make the problem worse and the necessary corrections more harmful to the country and to the most vulnerable in our society; and
• Third, raising the debt ceiling and tackling the fiscal challenges facing our nation will require both a bipartisan effort and presidential engagement.
As Mr. Cantrill related about that anonymous staffer, it's going to be painful, but it's going to happen.
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* https://bipartisanpolicy.org/letter/the-time-for-action/
Jason Fichtner, the BPC's VP and Chief Economist, recently testified* before the Senate Committee on the Budget at which he gave three key points.
• First, Congress must raise the debt ceiling. Period. Full stop.
• Second, the nation’s debt is on an unsustainable trajectory and action must be taken now. Further delay will only make the problem worse and the necessary corrections more harmful to the country and to the most vulnerable in our society; and
• Third, raising the debt ceiling and tackling the fiscal challenges facing our nation will require both a bipartisan effort and presidential engagement.
As Mr. Cantrill related about that anonymous staffer, it's going to be painful, but it's going to happen.
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* https://bipartisanpolicy.org/letter/the-time-for-action/
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CSM Chuck Stafford
COL Randall C. I'd rather deal with this now -- as the leadership mantra goes -- Bad news doesn't get better with age.
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