The claims from President Barack Obama and others that failure to raise the debt ceiling will lead to calamity are vastly overdone, says Emil Henry, an assistant Treasury secretary under President George W. Bush.
He’s unimpressed with the House Republican leadership’s decision to try pushing through a suspension of the $16.4 trillion debt limit until mid-May.
“The GOP strategy may work,” Henry writes in The Wall Street Journal. “But it may also lead to a series of unsatisfying debt ceiling increases as talks drag on — their dreams of a budget breakthrough dying from a thousand non-cuts.”
Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.
Talk that failure to increase the debt limit could lead to a government default is overblown, Henry says. Government interest payments will amount to just 7 percent of tax receipts this year, according to the Congressional Budget Office.
“Republicans should recognize that the decibel level from the opposition is, in part, a reflection of the danger that debt limitation poses to the aspirations of those who perennially deny the arithmetic certainty of the country's insolvency in the absence of entitlement and spending reform,” Henry says.
But plenty of others think House Republican leaders are doing the right thing.
The decision to support a debt limit hike “may suggest that the process of resolving the uncertainty over the course of fiscal policy will be less disruptive than previously expected,” Nomura economist Lewis Alexander writes in a commentary obtained by Business Insider.
Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.
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