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.

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.