The End is Not Nigh!

CASCADE POLICY INSTITUTE/INSIDER, by Joseph Cox (guest) - Why not increasing the U.S. debt ceiling may not be the end of the world. “The end of days is nigh,” or at least that’s what you hear from President Obama when he says, “We would risk sparking a deep economic crisis….For the first time in our history, our country’s triple-A credit rating would be downgraded. Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people.” ∴ In fact, nobody knows the consequences of a debt deal – or of the absence of one. But maybe not raising the debt ceiling actually would benefit the economy. There are three reasons for this:

1. Treasury rates are not necessarily the lowest rates
   
2. A rise in inflation may release productive money
   
3. A drop in government support could reintroduce healthy moral hazard into financing and investment

Let’s go through these in detail: Read more at Cascade Policy Institute