House Budget Committee Chair Paul Ryan doesn’t seem to think that defaulting on the national debt is a big deal:
Holders of US government debt would be willing to miss payments “for a day or two or three or four” if it put the US in a stronger position to pay them later on, Rep. Paul Ryan told CNBC Tuesday.
“That’s what I’m hearing from most people,” said the Wisconsin Republican, chairman of the House Budget Committee. “What is more important is that you’re putting the government in a materially better position to be able to pay their bonds later on.”
Unless the government acts to raise the debt ceiling by Aug. 2, the U.S. will be in default. Ryan, echoing House Majority Leader John Boehner, argued any deficit-reduction plan should include no tax increases and cutting spending by a dollar for every dollar the debt ceiling is raised.
Ryan doesn’t expect Congress to reach an agreement by the deadline.
“Look, I don’t think we’re going to solve 40 years of ideological differences between the two parties by August,” he said.
Andrew Pavelyev is flabbergasted:
Aren’t there any adults left in the Republican Party who could tell Paul Ryan that it is never acceptable for a chairman of the House Budget Committee to talk like this? Such crazy talk from somebody in such position has the potential to plunge the country into a recession. Fortunately, the markets seemed not to take Rep. Ryan seriously. Next time we may not be so lucky.
To answer Pavelyev’s question, I’m not sure there are any adults left in either party, or at least not any that are willing to talk like adults to the American people. The debt limit will have to be raised, there’s simply no way around that. The idea that, instead of doing the responsible, rational thing, we can resolve 40 years (or more) of fiscal irresponsibility in six weeks, is simply insane. As for how the markets are reacting so far, I have to believe that the bond markets are still holding out hope that a deal will be reached and catastrophe will be averted. They won’t keep believing that for long if Washington fails to act, though.
