v**********m
发帖数: 5516 | 1 CBO Chief Says U.S. Debt Default Could Cost Taxpayers Billions
By Brian Faler - Jun 14, 2011 1:03 PM ET
A U.S. government default on its debts would be a “dangerous gamble” that
could easily cost taxpayers billions of dollars, the head of the
Congressional Budget Office said today.
Doug Elmendorf told reporters that if the investors who buy federal debt
begin demanding even modestly higher interest rates, to compensate for
additional risk, it could quickly add more than $100 billion to the interest
payments the government must make on its debt.
“It is a dangerous gamble because any government that has borrowed as much
as ours has borrowed, and will need to borrow as ours will need to borrow,
cannot take the views of its creditors lightly,” Elmendorf said today at a
breakfast in Washington sponsored by the Christian Science Monitor. “Even a
small increase in the perceived risk of Treasury securities would be very
expensive for the country.”
If interest rates increased by 10 basis points, it would add $130 billion to
interest payments over the next 10 years, Elmendorf said.
A bipartisan group of lawmakers is set to meet again today behind closed
doors to hash out a deficit-reduction plan ahead of an Aug. 2 deadline to
raise the $14.3 trillion debt ceiling. The group, led by Vice President Joe
Biden, is set to meet three times this week as lawmakers pick up the pace of
negotiations. Elmendorf wouldn’t say whether his agency is examining
proposals being considered by the group.
The economic impact of any deficit-reduction plan will depend in part on how
quickly changes are phased in, Elmendorf said, saying that if lawmakers cut
too much too soon, it could damage the recovery.
“We think that cuts in government spending or increasing taxes in the next
few years would reduce economic activity and employment relative to what
would otherwise occur,” Elmendorf said. “At the same time, we think that
reductions in government spending or increases in taxes later in the decade
would hold down interest rates and increase confidence today in a way that
would increase output and employment. That may sound like a contradiction,
but it is not.”
To contact the reporter on this story: Brian Faler in Washington at Or
b****[email protected] |
|
