Fox recently attacked President Obama's response to a CBS poll that found 69 percent of the public thinks the debt ceiling should not be raised. However, Fox did not mention that the poll also found that 72 percent of the public believe it is "at least somewhat likely that the economy will take a severe downturn if the [debt] ceiling is not raised"; furthermore, economic experts agree that there could be severe consequences if the debt ceiling is not raised.
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Fox Highlights CBS Poll Result Showing Opposition To Raising Debt Ceiling
Carlson: "A Majority Of Americans Oppose Raising The Debt Ceiling." On the July 14 edition of Fox News' Fox & Friends, co-host Gretchen Carlson claimed, "President Obama becoming defensive earlier this week when asked about this poll showing a majority of American oppose raising the debt ceiling," and asked if Obama was "telling the American people that he knows better." During the segment, Carlson aired the following on-screen graphic highlighting one of the poll's results:
But Same Poll Also Found Public Thinks Economy Will Suffer If Debt Limit Is Not Raised
CBS Poll: "Seventy-Two Percent" Of Respondents Think "The Economy Will Take A Severe Downturn If The Ceiling Is Not Raised." The CBS poll also noted, however, that a large majority of respondents "think it is at least somewhat likely that the economy will take a severe downturn if the ceiling is not raised." From the CBS News poll:
But the public expresses some concern about the economic consequences that could result from not raising the debt ceiling. Seventy-two percent think it is at least somewhat likely that the economy will take a severe downturn if the ceiling is not raised, but just 25 percent think that's very likely to occur. More than half say it is at least somewhat likely that Social Security, Medicare and veterans' payments won't be made, including 19 percent who think that's very likely to happen. Another 38 percent say the stoppage of payments for these programs is not very likely to happen if the nation's debt ceiling is not raised. [CBS News, 6/8/11]
And Experts Agree That Failure To Raise Debt Ceiling Could Have Severe Economic Consequences
Politico: U.S. Going Into Default Is "An Unthinkable Idea To Many Economists And Market Participants." From Politico:
Republicans are growing increasingly concerned about the impact a bruising fight over raising the nation's $14.29 trillion debt ceiling could have on U.S. financial markets.
House Speaker John Boehner (R-Ohio) has had conversations with top Wall Street executives, asking how close Congress could push to the debt limit deadline without sending interests rates soaring and causing stock prices to go lower, people familiar with the matter said. Boehner spokesman Michael Steel said Tuesday night that he was not aware of any such conversations.
Treasury Secretary Timothy Geithner has warned Congress that without new borrowing authority, the federal government could hit the statutory debt limit by May 16.
Treasury could then implement emergency measures to continuing making interest payments on existing debut until around July 8. After that, the U.S. risks going into default, an unthinkable idea to many economists and market participants who say such an event could drive scores of large banks into failure, send interest rates skyrocketing as foreign investors abandon U.S. securities and crush the already slow-going economic recovery. [Politico, 4/13/11]
MSNBC: If Default Causes Interest Rates To "Rise Too Far, Too Fast, The U.S. Economy Could Face The Risk Of Another Recession." From an April 11 article on MSNBC's website:
Washington is gearing up for a battle over how many trillions the federal government can borrow to pay its bills, and it's shaping up to be an even bigger brawl than the one just resolved over funding the government for the next six months.
While investors viewed last week's budget brinksmanship as a minor event, they are beginning to grow concerned that many lawmakers and ordinary Americans, [sic] fail to grasp the implications of even suggesting the United States would default on its debt obligations.
What is a political football to Congress could end up flattening the economy and hurting consumers by lowering the nation's pristine credit rating and sending interest rates sharply higher.
So far, bond market investors apparently are not very worried; the United States has never defaulted on its debt and many have long thought a default unimaginable. On Monday, amid the rancorous aftermath of the budget battle that nearly shut down the government, bond prices were flat.
But some investors are betting that bond prices are headed lower. As the Federal Reserve wraps up a $600 billion round of bond buying designed to keep interest rates low, many investors are wondering what will replace that program when it expires in June. On Monday, the giant investment fund PIMCO, which recently dumped its holdings of U.S. Treasury securities, disclosed that it has gone even further and is now selling U.S. debt short -- a bet that bond prices have further to fall.
Falling bond prices hurt more than the investors who hold them. As prices fall, interest rates rise. If they rise too far, too fast, the U.S. economy could face the risk of another recession. Without borrowing authority, the government would be powerless to pay all its bills, much less assemble another stimulus package to revive the economy. [MSNBC.com, 4/11/11]
Ex-Treasury Official: "This Would Make The Lehman Brothers Bankruptcy Look Like A Walk In A Park ... They're Really Playing With Fire." From The Huffington Post:
If Congress doesn't raise the $14.3 trillion debt limit by mid-May, the U.S. government will have to resort to emergency measures to avoid default. One missed payment, which could happen as soon as July if the ceiling is not raised, would likely set off a widespread global panic, causing borrowing costs to skyrocket and severely crippling the nation's economy.
But Republican lawmakers have said they will use the debt limit as a means of enforcing fiscal austerity, insisting they won't raise it without winning concessions from Democrats.
Meanwhile, Jim Millstein, the former restructuring officer at Treasury, who helped reorganize AIG, outlined how disastrous the consequences of default would likely be. Speaking on CNBC on Tuesday, he said that a Treasury default would affect investors of all sorts, and he criticized those who downplay the consequences.
"This would make the Lehman Brothers bankruptcy look like a walk in a park on a sunny day," he told CNBC's David Faber. "They're really playing with fire." [The Huffington Post, 4/13/11]
Even Some Fox News Figures Have Said That Not Raising The Debt Ceiling Would Be "Armageddon"
Varney: "No Politician Is Going To Allow The U.S. Government To Default ... But If It [Happened], It Would Indeed Be Armageddon." On the April 13 edition of Fox News' Fox & Friends, guest and Fox Business host Stuart Varney agreed with White House press secretary Jay Carney that failure to raise the debt ceiling would be "Armageddon." Varney added that it would be "the worst of all possible worlds economically." From the show:
GRETCHEN CARLSON (co-host): So what will really happen if Congress does not vote to raise the debt ceiling by the May 16 deadline? Stu Varney says it would be Armageddon. You are agreeing --
VARNEY: Oh, yes. It would.
CARLSON: -- with Jay Carney and President Obama.
VARNEY: Look, it's not going to happen, OK? No politician is going to allow the United States government to default. It's just not going to happen. But if it did, it would indeed be Armageddon, OK? It would be the worst of all possible worlds, economically. OK. Go through the chain reaction. All the world's big banks have lent Uncle Sam money. In the event of a default, Uncle Sam doesn't pay back that money. And the banks have no money. They are bankrupt. They cannot make car loans. They cannot make house loans. They can't finance smaller companies. Even their payroll. So you --
CARLSON: OK, so if it's not going to happen -
VARNEY: -- you've got an instant depression. Not going to happen.
CARLSON: This is a major bargaining chip for the Republicans, though -
CARLSON: -- who will say, the only way we're going to vote for this, President Obama, is if you give us tons of stuff in return.
VARNEY: Well, there's a great danger in that. Because as you approach this deadline, if you're even talking about default, as even a possibility, a remote possibility, you really spooked the world's money people. You really spook them. [Fox News, Fox & Friends, 4/13/11 via Media Matters]
Goldberg: Not Raising The Debt Ceiling "Would Be Catastrophic." On the April 11 broadcast of Fox News' The O'Reilly Factor, Fox News contributor Bernie Goldberg discussed media coverage of the debt ceiling debate and predicted: "[Y]ou will see stories about how, if the Republicans play hard ball again and act, according to the words of the editorial, irresponsibly and like a bunch of radicals, how if they behave that way again when it comes to raising the debt ceiling, we could have a default in this country, and that would be catastrophic. It would be." [Fox News, The O'Reilly Factor, 4/11/11, via Nexis]