Olduvaiblog: Musings on the coming collapse

Home » Collapse » Peter Schiff On The Debt Ceiling Delusions | Zero Hedge

Peter Schiff On The Debt Ceiling Delusions | Zero Hedge


Peter Schiff On The Debt Ceiling Delusions | Zero Hedge. (FULL ARTICLE)

Submitted by Peter Schiff via Euro Pacific Capital,

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has adelusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle.Democrats, and the President in particular, believe that continually taking on more debt to pay existing debt is a more responsible course of action. Even worse, they appear to believe that debt accumulation is the equivalent of economic growth.

If Republicans were to inexplicably prevail, and the federal government were to cut spending so that its expenditures matched its tax revenues (a truly radical idea) the country’s financial mess would be laid bare. The government would have to weigh the relative costs and benefits of making interest payments on Treasury debt (primarily to foreign creditors) or to trim entitlements promised to U.S. citizens. But those are choices we will have to make sooner or later anyway. In fact we should have dealt with these issues years ago. But generations of mechanistic debt ceiling increases have allowed us to perpetually kick the can down the road. What could possibly be gained by doing it again, particularly if it is done with no commitment to change course?…

 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 313 other followers

  • 69,392

Archives