Top GOPer Advocates Position That He Admits Could Be “Catastrophic”

Jeb Hensarling TX

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A quick follow-on to our last post about the market ignoring the risk of a US default (as a result of the debt ceiling now being raised).The debt ceiling was obviously a big part of the discussion on the Sunday news shows today.

Listen to what top GOP Rep. Jeb Hensarling had to say

Asked by CNN’s Candy Crowley if Republicans were willing to “play chicken” with the debt ceiling, Mr. Hensarling said, “I don’t know what you mean.”

He acknowledged that a government default would be “catastrophic,” but said the argument was based on a “false premise,” because the U.S. can cut spending and reduce the deficit.

So essentially the view of one party is: We’ll induce a “catastrophic” (in his own words!) event if certain policy paths aren’t agreed to in the next few weeks.

The market should be scared.