• Home
  • News
    • Politics / Govt
    • Legislature
    • Crime / Courts
    • Health / Medicine
    • Archives
  • Sports
    • Badgers
    • Packers
      • Titletown Report
    • Brewers
  • Contact Us
    • Reporters
  • Affiliates
    • Affiliate Support

Wisconsin Radio Network

Wisconsin News and Sports

You are here: Home / News / UW economist warns of uncertainty at edge of default (AUDIO)

UW economist warns of uncertainty at edge of default (AUDIO)

October 15, 2013 By Bob Hague

A UW Madison economist says even the threat of default by the federal government will stress financial markets. Professor Menzie Chinn said, with U.S. Treasuries used as collateral for a lot of short term lending, edging up to the precipice of default is bound to lead to uncertainty.

“The whole system for firms to be able to borrow and lend short-term is going to grind to a halt,” he said. “Or at the very least it’s going to be a lot of uncertainty, so interest rates will spike up all along the way,” said Chinn, a Professor of Public Affairs and Economics at  UW’s La Follette School of Public Affairs.

AUDIO: Bob Hague interview (4:00) 

“I think as it becomes apparent that it’s very hard to get an agreement between the various parties and that time is short – you can’t do these things instantaneously – I expect a lot more volatility.”

Negotiations are continuing in Washington, with a Thursday deadline to increase the debt ceiling. The U.S. Treasury would only have cash on hand to pay bills to the end of the month. Chin doesn’t think a resolution can be reached before the economy is impacted. “My guess is that it won’t be timely enough so that we don’t have some self-inflicted harm.”

Chinn notes that the government shutdown of 2011 was enough to raise the costs for the federal government to borrow money. “The markets are going to be roiled considerably at exactly a time where you don’t need the markets to be roiled, and it may that the very fact that you edge up to the precipice means that everybody is going to require a higher rate of return than they otherwise would have to hold U.S. Treasuries,” Chinn said.

 

Share this:

  • Facebook
  • Twitter

Filed Under: News, Politics / Govt



Featured Stories

Republicans gavel in and out of special session to overturn Wisconsin’s abortion law

Juneteenth flag raised at Wisconsin Capitol

Gableman invokes 5th amendment, elections probe found in contempt in open records case

House passed gun purchase background check bills last year with no support from Wisconsin Republicans

Future of abortion in Wisconsin hinges on SCOTUS ‘Roe’ decision

TwitterFacebook

Sports Headlines

Giannis breaks franchise scoring record, Bucks beat Nets in OT

Wisconsin’s Davis declares for NBA Draft

Badgers to face Arizona State in Las Vegas Bowl

Williams likely out for the season with broken hand

Packers releasing TE Jace Sternberger

More Sports

Tweets by @WRN

Get our news delivered to your inbox:

Enter your email address:

Delivered by FeedBurner

Copyright © 2022 · Learfield News & Ag, LLC