Dancing on the edge of a cliff – Twin Cities

 Dancing on the edge of a cliff – Twin Cities

Once again our nation is caught up in a to-do about the “debt ceiling” and what might happen in the event of a “government shutdown.”

Edward Lotterman

The first is a gimmick, originally enacted as a symbolic gesture in 1917 congressional maneuvers to facilitate borrowing to fund U.S. participation in World War I. Since then it episodically serves as a prop for political street theater, as we’re seeing this month. I don’t know of a single respected economist who thinks it serves a useful purpose, but it never gets abolished

The idea that a failure of our federal legislative process would result in a “shutdown” of government, including an inability to make contractual or statutorily-guaranteed payments, similarly is bizarre to economists. We operate in a mental world of rational human decision-making — that rational elected representatives, faithful to their oaths, would ever be so irresponsible as to end up in this…

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