Wednesday, October 2, 2013

Default Catastrophic?

Yes, according to Erskine Bowles:

If the U.S. hits the debt ceiling and defaults on its obligations, it would be catastrophic not only domestically but around the world, said Erskine Bowles, former co-chair of the president's debt commission and co-founder of the Campaign to Fix the Debt.

You would think the co-founder of an organization called “Campaign to Fix the Debt” might take a different view?

First of all, default is coming one way or another.  The default might take many forms for a time (changes in benefit programs, currency debasement, etc.), but eventually there will be real, no-kidding defaults – the easiest will be for the Fed to write-off the Treasury debt it holds.

Second, catastrophic for whom?  Not the US taxpayers.  Not those being spied upon.  Not those being killed via drone.

"We need to get through these man-made crises" and get to the real issues of reducing the nation's debt, Bowles said Wednesday on CNBC's "Squawk Box."

A great way to reduce the nation’s debt (for those who speak in such terms) is to default.  It certainly is the most moral way.

The cost of the first government shutdown in 17 years is running about $12.5 million an hour or $300 million a day, according to economic-consulting firm IHS Global Insight.

Only a bureaucratic state could figure out how to have not doing anything actually cost money….

Some shutdown.

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