Can we fix our fiscal issues without fixing Social Security and Medicare?
No. We need leadership on this. The programs can’t continue the way we’re going. I’m a little more optimistic on Social Security. We need to work longer, pay more, or take fewer benefits when we retire.
The debt-reduction task forces – will they do any good?
More and more lawmakers realize the gravity of our fiscal position and the urgency to act. I’m optimistic, but also concerned: The window of opportunity to get something done is very narrow. We don’t have much time to get a deal done.
What would the fallout look like?
We may see an immediate spike in interest rates. The dollar could plunge; inflation would immediately pick up. To think people are playing political games when so much is at stake is irresponsible. You don’t play Russian roulette with a default.
Will Congress raise the debt limit in time?
It would be extremely irresponsible not to act and go into a technical default. Most of our debt is owned by foreign entities. The dollar is a safe haven, as is Treasury debt. If we do anything to cripple our spending on global markets, the damage would be massive.
Is there a double-dip risk from the latest jobs data?
We don’t believe so. We should see a reacceleration of growth in the second half of the year. Reasons for the slowdown: high energy, high gas prices, auto sector disruption, economic disruptions from severe weather.