The debt-limit impasse could cause credit markets to freeze, the dollar to plummet and interest rates to rise precipitously, the Treasury Department said in a report released Thursday. A default might prove catastrophic, the report said, and could potentially result “in a financial crisis and recession that could echo the events of 2008 or worse.”
“As we saw two years ago, prolonged uncertainty over whether our nation will pay its bills in full and on time hurts our economy,” said Treasury Secretary Jacob J. Lew in a statement urging lawmakers to act. “Postponing a debt ceiling increase to the very last minute is exactly what our economy does not need – a self-inflicted wound harming families and businesses.”
The report shows that the Congressional debt-limit standoff in 2011 hurt consumer confidence, small business confidence, household wealth and the stock market, with ramifications for lending and the economic recovery.
Absolutely we don’t need another crash or even a mini crash. Only the Congress can stop this senseless, self-inflicted wound from happening. We don’t need Ted “Honey Boo Boo of Washington” Cruz sending out any more beams to the banana republicans telling them to devour their young or to inflict more pain on the American people, just to get even with President Obama for whatever he did wrong in a past life. I don’t think many of the 79 or 80 band of thugs have any idea what could happen to this country if they continue on their charted trajectory.
Meanwhile, Speaker Boehner has told fellow Republicans that he will not let the nation default and that he is willing to by pass the informal Hastert Rule if necessary to avoid taking the country to the financial brink. I hope he is true to his word. Many Americans have not fully recovered from the crash of 2008. Some of us are still recovering from the debt stand-off in 2011. Financial times are iffy enough without more self inflicted wounds to the nation and our economy.
If my portfolio which is not even close to being high risk is any example, the markets are already feeling the tremors.
The markets tend to anticipate and are forward looking. They have been weak for quite a while in anticipation, against all rational analysis, that the Republicans in the House will be as reckless as they have proven themselves to be. Most of us have paid dearly to fund this foolishness. It has, in essence, been a confiscatory, very high rate Republican tax imposed on the population to fund their mindless frolic. On an annualized basis, I would guess that the tax rate, based on what has happened to my investment accounts is somewhere in the the neighborhood of 75%. Of course, some of it may recover once we get passed all this silliness, but it was a gratuitous dent imposed solely and completely by adults with childlike minds who appear to care about nothing other than protecting their right flank and fund-raising for their next election campaign.