Deadlines, debt and downgrades

Find below an excellent note from Westpac covering the fallout from various scenarios emanating from the US debt-ceiling debacle. The note is both useful and entertaining, with Russell Jones of the rates strategies team nicely capturing the absurdity of the situation.

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Comments

  1. One of the few positive aspects … is the avoidance of a balanced budget constitutional amendment. Frankly, this is the macroeconomic equivalent of the flat earth society. It is the economics of the madhouse.

    Well stated. A mandated balanced budget is the equivalent of legislating permanent private sector indebtedness.

  2. I think a mandated balanced budget is the equivalent of legislating permanent fiscal responsibility.

    14 trillion people!! This needed to occur…finally someone made a tough decision and didnt just think that increasing debt levels should be rubber stamped.