Obama Seen as Chicken Little on Default

Photo Credit: IshronaA growing number of economists and politicians say President Obama is just factually wrong when he claims the United States is risking default by not raising the debt celing.

They also say Obama is mistaken in claiming that failure to raise the debt ceiling would be a disaster, or as he put it, “insane, catastrophic, chaos.”

One famous economist even goes so far as to portray the president’s dire warnings as outright dangerous and irresponsible. CNBC’s Lawrence Kudlow accused the president of threatening “to pull the whole system down for (his) own gain.”

No default

Obama has repeatedly insisted that not raising the debt ceiling would mean the United States could not pay the bills it has already accumulated – the payments Congress has already authorized – and would result in a default.

Not true, wrote Jeffrey Dorfman in Forbes. The University of Georgia economics professor explained, “Reaching the debt ceiling does not mean that the government will default on the outstanding government debt. In fact, the U.S. Constitution forbids defaulting on the debt (14th Amendment, Section 4), so the government is not allowed to default even if it wanted to.”

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