Everyone who knows anything about economics agrees: not raising the debt ceiling is a horrible idea. But Ted Yoho, a Republican Congressman from Florida who used to work as a veterinarian, thinks the debt ceiling should stay where it is. Forever.
"I’m not going to raise the debt ceiling," Yoho, a member of the Republican block who pushed for the government shutdown, told the Washington Post's David Farenthold. The 58-year-old House freshman has decided, against the better judgement of economic experts and both Republican and Democratic leaders, that not raising will not lead to the catastrophic economic effects we've been warned about. In fact, not raising the debt ceiling will be beneficial for the world's economy, Yoho has decided:
“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt.
This is not what most people expect will happen if the U.S. does decide not to raise the debt ceiling before October 17. If action isn't taken, the country will effectively default on its loans. The Treasury Department recently released a report detailing the potential consequences of a default. "In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth — with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression,” the report said. So those are the stakes if the debt ceiling isn't raised.
Pretty much everyone agrees this cannot happen. House Speaker John Boehner has promised not to let the country default. Senate Majority leader Harry Reid doesn't want a default. The private sector agrees, too: CEOs from all the major American banks met with the President this week to warn him about defaulting on the country's debt. The country will be like "a deadbeat," if the debt ceiling isn't raised, the President told the Associated Press over the weekend.
This article is from the archive of our partner The Wire.