SJSU Professor Says Default Preferable To Debt Deal
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 This material may not be published, broadcast, rewritten, or redistributed.)