Alan Krueger, who was Assistant Secretary for Economic Policy and Chief Economist of the U.S. Department of the Treasury 2009-2010, said in an interview that raising the debt ceiling must simply be done....
>>>Alan Krueger, who was Assistant Secretary for Economic Policy and Chief Economist of the U.S. Department of the Treasury 2009-2010, said in an interview that raising the debt ceiling must simply be done.
In an interview with Yu Chen, he said the following: “We are approaching the debt ceiling again. The debt ceiling is a funny animal. Congress tells Treasury to spend money on various programs, and it authorizes the collection of a certain amount of tax revenue, expecting Treasury to borrow to make up for any shortfall of revenues over spending. Yet, it also sets a limit on how much debt the government can accumulate. The Treasury isn't borrowing money because it wants to; it is borrowing because Congress chose to spend more money than it chose to collect. If Congress wants to limit the debt, it should vote to cut spending and/or raise revenues -- and it can do that independently of voting to raise the debt ceiling. So, in my view, the debt ceiling is an unnecessary constraint that can cause severe damage to the financial reputation of the United States and health of the world economy if it is not raised in an orderly way that is congruent with past spending and taxing decisions.
I'm 90% confident that, despite all the attendant drama, the debt ceiling will go up without incident. And I suspect the debt ceiling might go up in steps rather than all at once, as it did last time. But I do think that Congress will do the right thing - the absolutely necessary thing -- and avoid a fiscal meltdown by raising the debt ceiling. Of course, there may be some strings attached.
Some Congressmen have said things like, "We don't believe that August is the real deadline. The Treasury Department will have some opportunity to juggle the books and move things around."
To read more about this interview, click on the link below:
http://www.huffingtonpost.com/alan-b-krueger/doubt-confidence-debt-ceiling_b_901035.html?ir=Business
