Some of the more radical Republican Congress-critters are feeling their new “power” and threatening to not raise the debt ceiling. President Obama’s top economic advisor, Austan Goolsbee, called this threat “insanity”, laying out the implications of the first default in history and the damage that it would do to the credit of the United States.
“Well, look, it pains me that we would even be talking about this,” he told co-host Jake Tapper. “This is not a game. You know, the debt ceiling is not something to toy with. 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. That would be a worse financial economic crisis than anything we saw in 2008.”
“As I say that’s not a game,” Goolsbee went on. “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. There would be no reason for us to default other than that would be some kind of game. We shouldn’t even be discussing that. People will get the wrong idea. The United States is not in danger of default. We do not have problems with that. This would be lumping us in with a series of countries throughout history that i don’t think we would want to be lumped in with.”
The good news for Goolsbee and the president is that House GOP leadership does seem to see the deficit ceiling debate a bit differently than their incoming Tea Party brethren — as does the intellectual establishment of the Republican Party, including George Will, who, following Goolsbee on ABC, criticized the idea of defaulting simply for symbolic reasons