Transcript:
Easan Arulanantham:
“Should we still be worried about the “debt ceiling”, because the short term bill only lasts till early December, and we saw what kind of market damage, just the brink of the “debt ceiling” could cause. Should we be preparing again for this?”
Tom Vaughan:
Yeah, that’s actually a really good question, and think about it for a minute. We did get kind of close, the actual debt ceiling expired at the beginning of August. And so they use these extraordinary measures to keep paying the bills. And those extraordinary measures were going to run out next week, and we just solved it yesterday. Pretty crazy, really. I hate this scenario. I hate that the politicians are playing with this, because it’s really, really potentially damaging. And so, but here’s a couple things. I do see some super big positives in the fact that they did do something. I wasn’t sure that there were. A matter of fact, there are people in Congress, in the Senate right now, who have advocated for letting the country default. I think that’s nuts. So that scares me. But in the end, they did get it done. They did move the needle to December. So theoretically, to me that means there’s the potential for some more negotiation, that some more softness in that negotiation. Unfortunately, it was an awful lot of criticism, about the negotiation about folding or what have you. Folding on the national debt is not something that’s happening.
So I do wonder if when we get back to the next level in December, if there isn’t more of a hardened base, because they got criticized for the positive negotiations that just happened this week. So that worries me a little bit. But the other part is, there are some other alternatives that just needed more time. So in other words, the Democrats can get the debt ceiling raised. And again, trying to raise it all the way through to next December, instead of this December. They could raise it through the reconciliation bill. And now that they have a little bit more time, they’re still negotiating on that bill. And so hopefully, they can get that organized and in the period of time we have, and then include the debt ceiling increase in that reconciliation bill, and then the Democrats can basically control that and take care of it themselves. So that, we’ll see, right? Because it is something to still be concerned about. But I am more optimistic about it now. More time helps, and the fact that there was some negotiation that was done. I think is a good sign, but… I won’t take my eyes off that ball, because I think it’s a really important component and we got to make sure that it does happen, but I think what did happen this week is definitely positive.