Today’s government shutdown may be a major headache for millions, but much worse crises may lie ahead
According to most, on Oct. 17 the U.S. Treasury will hit its legal debt ceiling. That could spell financial Armageddon.
We analyzed it in detail this morning in
Debt ceiling fight may cause global financial meltdown, constitutional turf war
In his Monday column in The New York Times with the superb headline Rebels Without a Clue, Prof. Paul Krugman, a Princeton economist and prize-winning author of multiple volumes, nailed it.
“[A] temporary government shutdown … wouldn’t be the end of the world. But a U.S. government default, which will happen unless Congress raises the debt ceiling soon, might cause financial catastrophe.
“Unfortunately, many Republicans either don’t understand this or don’t care.”
You bet they don’t care!
“This may be the way the world ends — not with a bang but with a temper tantrum,” was the first sentence of Krugman’s column.
He is so right.
What’s going on in Washington right now is nothing more than a pre-adolescent temper tantrum.
But things could get far worse in a couple of weeks if the children don’t grow up.
It could even become a constitutional crisis for America.
U.S. government debt is the “gold standard” of the global financial system, Krugman explains. It all rests on the “full faith and credit” of the U.S. Treasury.
In a word, it all depends on confidence.
If the financial geniuses lose faith that the United States will not honor its debt, the entire world is in serious trouble.
You ain’t seen nothing yet!
In the (K)now