Bill Gross Says 'Don't Mess With the Debt Ceiling' "To raise or not to raise the debt ceiling; that is the question," muses Bill Gross in today's The Washington Post. "I can tell you what an unbiased investment manager thinks: Don’t mess with the debt ceiling," he writes. "Unbiased," the CEO of investment firm PIMCO calls himself, because his firm holds very few Treasury bonds, a position hashed out in Megan McArdle's Atlantic profile this June. John Boehner has said allowing the August 2 debt ceiling deadline to pass without reducing spending would be more irresponsible than refusing to raise the borrowing limit. But Gross notes that "responsibility ... is not an either/or proposition," as a hit to U.S. credit would raise interest rates on bonds, creating vast amounts of new debt. "Bond investors are a conservative lot," he warns, "they expect certainty on when, and whether, they will be repaid. Countries that keep them guessing or that are expected to default are punished severely." Finally, he concludes, America's status as a reserve currency is founded on years of stability which is now threatened. "If our government doesn't give a damn about the greenback dollar and its solvency," he asks, "why should we expect others to protect its status as a reserve currency?" As far as Gross is concerned, there isn't even a question, here: the debt ceiling must be raised.
David McCullough on Bastille Day U.S.-French relations may be strained by the Dominique Strauss-Kahn case, but "the ties that bind America and France are more important and infinitely more interesting than most of us know," writes historian and author David McCullough in The New York Times. McCullough outlines the long history of important contributions France has made to the United States, beginning with France's financial and military support during the Revolutionary War. Also from France: The Louisiana Purchase, the Statue of Liberty, and the names of cities and lakes across the country. "For well over 200 years, our most gifted American writers, artists, architects, composers, musicians and dancers have flocked to Paris to study and work, nearly always to their benefit and ours." Our history has unfolded there, most notably during the two world wars. "I am not an overboard Francophile," McCullough concludes, "But as an American I think it is well past time to get back to respect and affection between our countries."