Senate Democrats

There They Go Again: GOP Lawmakers, Ignoring Reagan, Still Downplay Consequences Of A Default

Nearly 25 Years After Gipper Warned Against Playing Politics With Debt Limit, House Conservatives Still Ignore Dire Warnings

 

REAGAN KNEW BETTER THAN TO RISK A DEFAULT …

Reagan Called Extending the Debt Limit “Necessary and Unavoidable” “This is an action that we just take to prevent the Government from defaulting on its obligations, and I have no objection whatsoever to doing so. In short, this extension of the debt limit is necessary and unavoidable.” [Remarks on Signing the Bill to Increase the Federal Debt Ceiling, 9/29/87]

 

·         President Reagan Said We Need to Increase the Debt Ceiling. “The business of our nation must go forward. We need the debt ceiling increase passed.” [Remarks at White House Meeting, 10/7/85]

 

… BUT THE PARTY OF REAGAN NOW IGNORES THOSE WARNINGS

Sen. DeMint: Republicans “Need To Get Prepared to Go Past August 2.” According to the National Review’s Robert Costa, Senator DeMint said Republicans “need to get prepared to go past Aug 2″ [Twitter, 7/20/11]

Rep. Brooks (R-AL) Scoffed At The Impact of Default. “Scoffing at claims of economic calamity if the debt ceiling isn’t raised, Rep. Mo Brooks, R-Ala., said such statements are ‘absolutely wrong’ and ‘misleading the American people.’ Brooks argued that the government would still have enough revenue to pay its creditors.” [AP, 7/20/11]

 

Rep. Steve King (R-IA) Denied US. Would Default If Debt Ceiling Not Raised. “America is not going to default. We’re just trying to scare people into being stampeded into a debt-ceiling increase. But we would hold our full faith in credit together regardless, unless the president had decided to punish America by refusing to pay our bills.” [ABC News Topline, 7/20/11]

 

Rep Renacci (R-OH) Said US. Would Not Default if Debt Ceiling Not Raised. “Renacci said without incurring more debt, the government would still have enough revenue to cover debt payments and Social Security. ‘We will not default on our debt,’ he said. ‘So really the question becomes, ‘what don’t we pay?’’” [Canton Repository, 7/20/11]

 

THEY SHOULD REALIZE THE DIRE CONSEQUENCES OF A DEFAULT:

 

DPCC REPORT: IF GOP FORCES A DEFAULT, EVERY FAMILY WILL PAY THE PRICE

POLITICO: DEFAULT COULD ‘SINK THE WHOLE BOAT’

REUTERS: U.S. DEFAULT COULD PROMPT NEW RECESSION: STUDY

THE HILL: KEY ECONOMIST: FAILURE TO RAISE DEBT CEILING WILL CAUSE SERIOUS DAMAGE

 

Default Could Cost Raise Interest and Mortgage Rates And Cost Economy 800,000 Jobs Every Year. “A serious and extended debt ceiling breach could lead big U.S. bond investors such as China to demand higher interest rates, which would in turn mean higher borrowing rates for businesses and consumers.  That would inevitably lead to slower economic growth, fewer jobs, higher mortgage rates and perhaps a prolonged double-dip recession — or even a depression.  The long-term damage of even a slight increase in interest rates could be enormous. It could cause a 1 percent increase in interest rates that economists said could shave nearly 1 percent off economic growth and cost 800,000 jobs every year.” [Politico, 7/18/11]

 

Reagan Called Extending the Debt Limit “Necessary and Unavoidable” “The first provision extends the Federal Government’s authority to borrow funds. This is an action that we just take to prevent the Government from defaulting on its obligations, and I have no objection whatsoever to doing so. In short, this extension of the debt limit is necessary and unavoidable.” [Remarks on Signing the Bill to Increase the Federal Debt Ceiling, 9/29/87]

 

·         President Reagan Said We Need to Increase the Debt Ceiling. “The business of our nation must go forward. We need the debt ceiling increase passed.” [Remarks at White House Meeting, 10/7/85]

 

Plurality of Americans Want to Raise the Debt Limit. In a NBC News/WSJ poll a plurality (38 percent) of Americans said the debt ceiling should be raised, a sharp reversal from June, when a plurality (39 percent to 28 percent) opposed that move.  [MSNBC, 7/19/11]

Former GOP Senators Howard Baker and Nancy Kassenbaum: We Need To Avoid Another Economic “Earthquake” From Default. “The prospect of default on the sovereign credit of the United States of America is so frightening, so significant, so sinister and so far-reaching in its impact that we can’t fail to deal with this issue. … the question is not really the debt limit but, rather, the fundamental commitment to honor our obligations. It’s about recognizing that the last thing a tenuous and fragile recovery needs is another earthquake, a wave of fear in the private sector that further inhibits job creation.” [Washington Post, 7/17/11]

 

Fed Chairman Bernanke: Default “Would Throw The Financial System Potentially Into Chaos.” ”Federal Reserve Chairman Ben Bernanke certainly drew a dire picture in testimony before the Senate Banking Committee on Thursday. He said a default would be a ‘calamitous outcome’ and ‘create a severe financial shock.’ The global financial system relies on Treasuries, backed by the world’s largest economy and long considered one of the world’s safest bets. ‘A default on those securities would throw the financial system potentially into chaos,’ Bernanke said.” [AP, 7/17/11]

 

235 Economists Including Six Nobel Laureates: Failure To Raise The Debt Ceiling “Could Push The United States Back Into Recession” ”We, the undersigned economists, urge Congress to raise the federal debt limit immediately and without attaching drastic and potentially dangerous reductions in federal spending. Not doing so promptly could have a substantial negative impact on economic growth at a time when the economy looks a bit shaky. In a worst case, it could push the United States back into recession.” [Economists’ Letter to Congress, 6/29/11]

 

Former Bush Treasury Official: An “Unprecedented” Failure To Raise The Debt Ceiling Could Push The Economy Back Into A Recession. Former Undersecretary of the Treasury for President George H.W. Bush Jerome Powell, “who spoke to House Republicans on Friday, said that if no deal is reached by the time the Treasury needs to pay interest and principal on its outstanding debt, the government would struggle to pay for much else — a spectacle that is ‘completely unprecedented’ and could spook investors. ‘So we service the debt and then we don’t service 50 percent of our remaining obligations, [such as education, social safety net and other programs] and that 50 percent is what the public sees,’ Powell said. ‘This gigantic cut in government spending is going to be a major negative shock to the economy, and it could push the economy back into recession.’” [Roll Call, 7/18/11]

 

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