Laurel Harbridge: ...what’s not clear ...is whether if you don’t raise it when you come up against [the debt limit], if you do kind of prioritize different aspects of what you are going to fund [the important thing is]—is how do the markets respond ? [That's what is not clear].
Tonight’s Chicago Metro suburban edition of Public Affairs with Jeff Berkowitz, which features Laurel Harbridge, Professor of political science at Northwestern University, airs at 8:30 pm in 24 North and Northwest Chicago Metro suburbs:
on Comcast Cable Ch. 19 in Buffalo Grove, Elk Grove Village, Hoffman Estates, parts of Inverness, Lincolnwood, Morton Grove, Niles, Northfield, Palatine, Rolling Meadows and Wilmette.
and on Comcast Cable Ch. 35 in ArlingtonHeights, Bartlett, Glenview, Golf, Des Plaines, Hanover Park, Mt. Prospect, Northbrook, Park Ridge, Prospect Heights, Schaumburg, Skokie, Streamwood and Wheeling.
Professor Harbridge debates and discusses with show host Berkowitz who was responsible for the federal government shutdown, the shutdown's winners and losers, the significance of the federal debt limit and its extension, trends in the last thirty years of bipartisan legislation being passed in the U. S. House. how political and policy making interests of the Democratic and Republican national parties may diverge and much, much more.
And, Wednesday night, our show featuring Professor Harbridge, airs in ten Chicago Metro North Shore suburbs at 8:30 pm on Comcast Cable Ch. 19 in Bannockburn, Deerfield, Ft. Sheridan, Glencoe, Highland Park, Highwood, Kenilworth, Lincolnshire, Riverwoods and Winnetka.
Jeff Berkowitz: ...For the U. S. Debt limit, [the amount of debt allowed was extended on Oct. 16, 2013 to an amount that is supposed to allow the U. S. Federal Government continue to borrow to meet its financing needs] until Feb. 7, right?
Laurel Harbridge: Yes.
Jeff Berkowitz: What that means... the Federal Government has borrowed currently about seventeen trillion dollars, and that was the debt limit- we had a law that said that the Federal Government could not borrow more than seventeen trillion dollars... they estimated the Federal Government would run out of [borrowing capacity]... on October 16...and what the Federal Government is obligated to do is pay the [U. S. Treasury bills (short-term debt)] and bonds (longer-maturity U. S. debt). But, if the U. S. Federal Government was to cut spending in certain areas—even with that debt limit—they could have spent a little less, so they would have more money to pay [principal and interest], so they wouldn’t have to go over the debt limit, they wouldn’t have to borrow [as much], so what people mean is, “Oh no, we don’t want to change spending levels...and so, we will default. You see what I mean?
Laurel Harbridge: I don’t think that it quite that simple.
Jeff Berkowitz: It’s not?
Laurel Harbridge: No, I mean I think that—One, the obligations of the Federal Government are not just to pay our debt; it is to pay the things that we have already promised that we would pay—
Jeff Berkowitz: That, too.
Laurel Harbridge: On medicare, social security—
Jeff Berkowitz: No, I meant that [those entitlements would have to be paid for], but still there are a lot of things that the federal government is not obligated to pay for—that we could cut—tbat are not entitlements.
Laurel Harbridge: Right, but even so to my knowledge, there has not been a budget proposed by either party that would have meant that we didn’t need to raise the debt ceiling. My understanding is that even the Republican Ryan budget would have required this debt ceiling to have been raised.
Jeff Berkowitz: But,just for a short time, for 30 days, 60 days, if you really wanted to work it out, you would have some leeway. There are lots of ways, I think. It’s more technical...I just thought it was worth making that point. [That is, the debt limit] doesn’t necessarily mean that the limit is February 7, 2014—that is, if they don’t do it by then, the world won't end.
Laurel Harbridge: Right, but the other thing is that what’s not clear because we haven’t ever risked it—is whether if you don’t raise it when you come up against [the debt limit], if you do kind of prioritize different aspects of what you are going to fund—[ the important thing is]--how do the markets respond [That's what is not clear].
Jeff Berkowitz: [Right], how markets respond-- that's the important thing.
Laurel Harbridge: I don’t know enough about ...to say one way or the other, but certainly, the speculation and the discussion throughout the last several weeks has been that if they didn’t [extend the debt limit], that the markets would respond very badly.
Jeff Berkowitz: The U. S. debt was downgraded a bit a few months ago and nothing really happened—you know why? Because of the point you just made. The markets said, “We don’t really care about the rating agencies [and what they do], the U. S. Dollar is still really key [and sound], we trust it and so forth," so that’s the key [point-- what do the markets say?].
Program recorded on October 16, 2013.