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Hitting Debt Ceiling would be “First Default Caused by Insanity”

Austan Goolsbee: Hitting Debt Ceiling Would Be ‘First Default In History Caused Purely By Insanity’

EW HAVEN — There are, it seems, only two major issues that have a set time frame for political brinkmanship between the White House and Congressional Republicans.

The Bush tax cuts will make for an interesting election-year dynamic when they expire in two years.

Well before that, however, the president will have to persuade GOP leadership to ignore Tea Party insistence and allow for the country’s debt ceiling to be raised. That issue is set to come to a head this spring. So far the administration has been (or perhaps just expressed a sense of being) self-assured that the ceiling will be raised, but on Sunday its rhetoric was noticeably sharper.

Appearing on ABC’s “This Week,” Austan Goolsbee, the chairman of the Council of Economic Advisers, laid out the fairly alarming implications of the United States defaulting on its obligations while asking the question: What type of insanity would persuade us to do this?

“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.”

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