Kremer’s claim is contradicted by the Treasury Department and the Congressional Research Service, who have said that arbitrarily deciding which payments the Treasury is obligated to make is legally dubious.
Worse yet, this reckless and misinformed stance has tangible consequences for the markets, as investors wonder whether our lawmakers understand high school level civics and government. During last summer’s debt-ceiling impasse, consumer confidence plunged and the Standard & Poor’s 500 dropped 10 percent. Similar pessimism was expressed last week in Morgan Stanley’s index of business conditions for the coming months.
“With another prolonged, high-stakes political circus expected in the coming months, fiscal policy uncertainty remains high,” the report said. “Business conditions expectations turned lower, and hiring remains subdued.”
Polls show that a balanced budget is a high priority for most Americans, and yet the House GOP’s debt-ceiling brinkmanship has proven deeply unpopular.
One can only surmise that voters are growing tired of Congress’ self-inflicted wounds to our economy.