It’s all anyone in Washington is talking about these days. The looming debt ceiling. The deadline is approaching fast. But whether or not we actually hit it is a different story.
Both sides of the political aisle are blaming each other, but analyst Jim McGrath says the blame starts with President Obama.
“We probably will have a default. We don’t have any Presidential leadership. We have a Speaker of the House that is determined to see spending cuts that nobody on the other side of the aisle is willing to concede,” McGrath said.
McGrath says the blame is on President Barack Obama.
“His motto is ‘never let a good crisis go to waste.’ If you have a crisis you can’t focus on his abysmal performance on the economy or on Benghazi,” McGrath explained.
But he also says the Republicans have played a role in the controversy.
“The Republican party doesn’t speak with one voice. Speaker Boehner has not articulated a clear strategy for going into these debt default negotiations, if there even are negotiations,” McGrath stated.
Markets take hit but analysts optimistic
Wall Street took a hit yesterday, with the Dow Jones Industrial Average falling over 136 points. But KTRH's Pat Shinn says most analysts don't think the U.S. will wind up defaulting.
“If we look at bond prices the markets do not think the United States is going to default on their debt,” Shinn said.
But even though it may not happen, the concern is already affecting the economy.
“Every day that this goes on we are shaving a little bit of economic growth. How much is up for debate. At a time when the economy is just barely positive we don’t need this,” Shinn explained.
If we wind up defaulting for the first time in our history, will it have an effect on your money? Will it have an effect on the retirement you're saving up to? Shinn says you shouldn't lose sleep over this.
“I put a ‘zero’ probability on the U.S. Treasury actually defaulting on the debt,” Shinn stated.
Shinn thinks we'll see a last second deal to avoid this looming crisis.