SAN JOSE (CBS 5) – One Bay Area professor has said that the deal to increase the Federal debt ceiling is no cause for celebration.

San Jose State Economics Professor Jeff Hummel has said it would have been a good thing if the government had defaulted on its debt.

“I think that a treasury default is inevitable, and has been inevitable for a long time,” said Hummel.

Hummel said he believes the U.S. should go beyond default and repudiate the debt – essentially saying we have not intention to pay the debt back in its entirety.

He wants the government to enact immediate governmental reform to encourage elected leaders to be more fiscally responsible in the future.

“It would make it more difficult for the U.S. Government to borrow, so it would be a balanced budget with real teeth,” said Hummel.

He describes the current congressional dealings as a way of delaying the inevitable.

“If they implement reforms, they can put this off for ten or twenty years, but I am hoping to see default in my lifetime,” said Hummel.

He said his default prediction was viewed as extreme when he first made it in 1993, but the recent debate has softened criticism, with more people seeing a future default as a real possibility.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments (45)
  1. MK says:

    “I think that a treasury default is inevitable, and has been inevitable for a long time.”

    The Professor is right. This “deal” is a pill which stops the pain, but does not cure the root cause of the pain. We are Greece.

  2. University of California Berkeley picks the pocket of the freshman 2011 class clean. University of California Berkeley tuition, fee increases are an insult. Californians face mortgage defaults, 12% unemployment, pay reductions, loss of unemployment benefits. No layoff of UC Chancellors, Faculty during greatest recession of modern times. Yudof curb wages, benefits for sons and daughters of Californians! If wages better elsewhere, chancellors, vice chancellors, tenured, non tenured faculty, UCOP apply for the positions. If wages are what commit employees to UC, leave for better paying position.
    UC wages must reflect California’s ability to pay, not what others are paid. There is no good reason to raise UC tuition, fees when wage concessions are available.
    The sky will not fall on UC.
    ‘Pitch in’ UC President, Faculty, Chancellors, Vice Chancellors, UCOP:
    No furloughs
    18 percent reduction in UCOP salaries & $50 million cut.
    18 percent prune of campus chancellors’, vice chancellors’ salaries.
    15 percent trim of tenured faculty salaries, increased teaching load
    10 percent decrease in non-tenured faculty salaries, as well as increase research, teaching load
    100% elimination of all Academic Senate, Academic Council costs, wages.

    (17,000 UC paid employees earn more than $100,000)

    However, rose bushes always bloom after pruning.

    UC Board of Regents Chair Sherry Lansing can bridge the public trust gap with reassurances that UC salaries reflect depressed wages in California. The sky will not fall on UC

  3. urolizzard says:

    This is only a delaying the inevitable Liberals in both parties have been spending and not living with in there wage for a long time. Invest accordingly when the mentally and fiscally inept are at the helm. Pay Off your debts invest in Gold, Tobacco, Annuities Fire the Liberals ( there is no cure or medicine for them ) at your earliest opportunity. Vote for people who have the capability and Integrety of fiscally managing a Pizza Parlor for starters then work upward from there. There are no credit cards or debt ceilings in a pizza parlors or in hell. AT the End of the Day You have done whats right created a product there is a demand for collected taxes and enough profit to live pay your employees and purchase materials for the next day and even give a way a few freebies in the budget. No Debt just sweat equity and Hard Work. Thats what it is all about folks. Live Well
    Good Karma

  4. Reality Check says:

    Nice ranting idiots. Keep on spouting what you are told by the fools in the tea bag movement. The teachings of “economists” have a lot to do with the current economic state. They have been preaching that de-regulation is a good thing, which has allowed such huge investment firms to be created. That is why when they failed the government HAD to bail them out. If you are stupid enough to think they should have been allowed to fail then it is too bad the did not. Then you would be able to see the absolutely horrific conditions that would have created. Keep on in-breeding and I am sure you will all be fine. BTW I am a Republican, not a Dem but I do my own analysis and thinking.

    1. Californication says:

      Strong reading comprehension. This article is about the government spending more than it takes in.

    2. Zul says:

      If you did your own research you’d realize a default would of been better than the pile of excrement they produced. All you have to offer the discussion is insults and false statements. ya and we’re the morons huh?

    3. mark says:

      I don’t believe your liberal ass.

    4. MK says:

      @Reality Check
      ” BTW I am a Republican, not a Dem but I do my own analysis and thinking.”

      Nope, you are a bitter Democrat. Republicans are happy and positive people, but I have yet to meet a happy Liberal.

      BTW, reread the article. You got it wrong.

  5. andy says:

    Where’s all the hatred coming from? Why are you so angry? Who is John Galt?

  6. Jay says:


    1. S Maria says:

      Obama seemed to be the only one who stayed above it all. The rest just spewed.
      It is amazing how much hate there is for someone who has never been as hateful and spiteful as many of the other politicians.
      I still believe it is racial. Sorry but the hatred in this country since his election brought out the hate that has been obviously there

      1. Rupert Pupkin says:

        Obama appears to have stayed above it all because he did not lead as a president is supposed to. If it makes you feel better to imagine as a person with white skin, well, whatever.

      2. Joe says:

        Um, what planet are you on? Obama said we need to compromise, but he didn’t compromise, he lied and there is NO compromise, the bill is what Obama wanted, the bill guarantees tax increases…read it before you post. I read the bill, you might want to also, it will probably make you happy based on your post.

      3. Jack says:

        Below it all is a more apt description. While Republicans and Democrats may have indeed acted a bit like adolescents at times, this was the first grown up conversation our government has had about the debt since 1995 and Obama was relegated to sitting at the kids table. He was essentially a nonfactor.

      4. roblavett says:

        Yeah it is. I hate that whte SOB

      5. Fed up with left wing LIES says:

        One of these days, some mindless left wing sheep is going to bleat that particularly offensive and slanderous piece of agitprop in my physical presence and I am gong to lose it and quite correctly and justifiably punch them square in the mouth.

      6. AMB says:

        Teabaggers are all racist white trash hillbillies, to a man.

      7. Squeezel says:

        @ AMB- at least you are not biased. Typical liberal- do as I say not as I do.

      8. blacknblue2 says:

        Racial? You’re funny. I still believe in the tooth fairy.

        He stayed above it all because he had nothing to say about it.

        Will you please leave go of the racial stuff. By now you should understand by now all that we are talking about is $$$ not the color of skin. Geezzz give it up for once!

      9. MK says:


        “Teabaggers are all racist white trash hillbillies, to a man.”

        I see, and your statement is not racist, you hypocrite!

        “Teabaggers?” Really classy! Now go watch some more porn!

      1. Fed up with left wing LIES says:


  7. Chris says:

    No wonder he is at San Jose State.

    1. Mountains Majesty says:

      And you are a genius?

  8. Sal says:

    Does anyone believe Washington will stop handing out checks? Of course not….they want to get re-elected. So they will devalue the dollar to pay off debt with devalued dollars. It is the kneejerk reaction governments have always done.
    So what do you do? Buy gold, foreign currencies from countries with better fiscal sense and stocks of companies that can raise prices to deal with the
    devalued dollar. And don’t reproduce since your offspring are going to suffer.
    The debt has been rising for years. Now the water will soon flow over the damn where everone can see the problem they have been ignorming for years despit the warnings of wise people like this professor.

  9. otis redding says:

    I believe that anyone who is at the public trough ought and is paid over 100k a year should be taxed at 70%. I believe that anyone who is an academic who proposes more taxes for working folks and investing folks ought to be taxed at 70%. I believe that if someone thinks taxes are too low should set an example and give away his retirement.
    And then perhaps the perfessor would like a lobotomy with a dull chain saw?

  10. Dan says:

    Repudiate the debt. Of the 15 trillion outstanding, about 1.4 trillion is held by China, maybe a trillion by Japan, Saudi Arabia, and Europe, and the rest by wealthy New Yorkers retired in Florida who have done very well off the American capitalist system. None of these people need the money anyway.

    1. Luke says:

      So you’re talking about 4.5 trillion held by foreign nations. That’s almost 33% which is a large figure. As to not paying back the “wealthy New Yorkers who have done very well off the American capitalist system”, you are in absolutely no position to decide if those people need the money or not. It’s not yours to dispose of.

  11. Bellah says:

    It’s the wars that have broken the bank.

  12. Bill says:

    A long time ago….in a galaxy far, far away…

    Once existed a country of unparalleled liberty and power, but they destroyed themselves from within.

  13. Huskrrrr says:

    In ten years the deficit will be 24 trillion dollars. Does anyone really beleive we can or will pay that back?

  14. Norm D. Plume says:

    The professor is correct. Default and repudiation is the ONLY way we can truly go forward, and get ourselves out of this morass.

    Face it. We are BANKRUPT. We might as well admit it, take our medicine, and pick ourselves up again. If we don’t do it now, we’re going to do it later, after having borrowed MORE money, and inflated our currency even MORE, and having lost MORE jobs and MORE industry.

    We are already past the point of no return. Continuing down this path will lead only to massive bloodshed and mayhem.

  15. Norm D. Plume says:

    Let Iceland be our guide. They told the international banking cartels to get stuffed. Now, they have a growing economy. They stood up on their hind legs, like men, and said, “No.”

    And that is what we MUST do. And SOON.

  16. jimmr says:

    It ain’t just the wars that broke the bank and neither party has much to crow about in starting or maintaining endless wars. Bottom line you cannot spend more than your income/revenue/taxes(stolen from the productive). Neither does it not work in my house nor should it in our houses of congress!
    You mean to say Obama is black? Damn, never noticed, I was so busy worrying about his policies I forget to check the color of his skin………..

  17. Fanny Forbes Franklen says:

    This ‘deal’ is just another rock in the crack pipe called government. If you think any of these people care about anything other than their self aggrandizement, you’re just another fool on the ship of fools sailing into the whirlpool of collapse.

    Government is just another circus of degenerates, mental dwarfs and people that would perish in an economy based on worth and value.


  18. bla says:

    Hey someone looking at the real world instead of economic lies and pandering to the lowest denominator.

  19. DavosSherman says:

    Kids who have Jeff as a professor are extremely fortunate. There are about 12 professors in this country who get the fact that $128,000,000,000,000.00 (128 trillion of debt) and 2 trillion of revenues spells one thing and one thing only BANKRUPTCY.

    Social Security 14.6 trillion in the red, GSE’s 3-6 trillion, Prescription drugs 19.2 trillion, Medicare 76 trillion, debt 14.2 trillion.

    Check out what these trillions look like piled up.

  20. Dan Danknick says:

    Those of you screaming about Repubs or Dems haven’t been paying attention: the looters are in both wings and colluding. This is make-believe government from “men” in body only. No character, no honesty. But this is what you want, America. Keep enjoying the Kardashians, Dancing With the Stars, NFL, etc. instead of becoming informed and involved. You love your bread and circuses so don’t be surprised by your sudden enslavement.

  21. Jack Kennedy says:

    the problem is that repudiating the debt would just give the liberals more money to spend spend spend

    and America would be in the same same again about 20 years later

    America’s no1 is the liberals and till we repudiate them, nothing will change

  22. Buttner says:

    Looks like honoring an obligation is no longer necessary. Figures this comes from a bay area “professor”. Same mindset that advises homeowners to walk away from their mortgage. So, “professor”, let me give you some real simple examples, so you can understand: At the grocery store, you pay the cashier, and the bagger takes all your items and re-stocks them, leaving you with nothing. At home, you find a can of beans to cook, but then PG&E cuts off your utilities, even though you paid your bill. Doesn’t matter, because your landlord shows up and kicks you out, even though you are current on rent. You get in a fight with him, and he slices you up pretty bad, but 911 doesn’t respond as expected. Somehow you get to the hospital, but you’re left to die on the operating table, because the on-duty doctor checked out early, to play golf. Reason why these things happened to you? Because you live in a world where no one has a sense of obligation, where honoring a contract means nothing. In the real world, if you don’t pay me, I’m coming after you. And I don’t care if the federal debt is one dollar or $80 trillion, we pay our obligations–it’s that simple. Now, go back to your lazy students, tell them to get a job and pay their debts, and you’ll actually be doing the job of an econ professor.

  23. al swearengen says:

    The political will of our leaders is limited by the will of the voters to endure the consequences of the hard choices that we all must eventually face. We all know that. This same old same old deal is just another capitulation to the will of the voters. The weakness of the politicians is a reflection of the voters. Got a problem with their kicking the can further down the road? Look in the mirror.

  24. Gray Poupon says:

    This champagne and caviar on credit will run out sooner than most people think.
    We are not Greece. We are more like Titanic. Unsinkable? Well, we all know how that turned out. We are not too big to fail. We have too much debt load not to fail.

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