Here’s a glimpse at how the Obama administration plans on dealing with the influx of Tea Partiers on their way to Congress.
On This Week yesterday, President Obama‘s top economic adviser Austan Goolsbee warned incoming Tea Party members to quit fooling around where the debt ceiling is concerned.
The U.S. debt ceiling is currently at $14.3 trillion. The federal debt is now at $13.9 trillion and the ceiling will likely have to be raised to accommodate that. Tea Partiers are threatening to vote against raising it. Goolsbee says the results of doing so could be catastrophic.
“If we hit the debt ceiling, that’s … essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic….I don’t see why anybody’s talking about playing chicken with the debt ceiling, if we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity.”
Later in the same show, George Will called the idea of raising the debt ceiling suicidal.
I know of no other developed nation that has a debt ceiling. This is a purely recurring symbolic vote to make people feel good by voting against it.
The trouble is it’s suicidal if you should happen to miscalculate and have all kinds of people voting against it as a symbolic vote and turn out to be a majority. Because if the United States defaults on its sovereign debt, the markets will be — well, it will be stimulating.
Video of Goolsbee below.
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