Below is a sampling of quotes by BU experts on the Standard & Poor’s downgrade of U.S. debt for the week August 8 – August 12:
“You add it up, our bond rating shouldn’t be AA+, it should be CCC at this point. I’m not kidding…It’s a scary mix of ingredients…If the market drops any more, this could lead to a double dip. At some point, all hell can break loose on our bond market. If people realize how broke the country is, they may start dumping bonds. This could be a catalyst and interest rates would shoot up. Bank assets would drop and banks would start to fail. People might panic and take money out of their money-market accounts.” (Boston Herald, Markets brace for worst after credit downgrade)
—Laurence Kotlikoff, Professor of Economics
“We’ve consistently done too little too late, looked too-short term, said the future would take care of itself, we’ll deal with that tomorrow. Well, guess what? You can’t keep putting off these problems.” (NPR “All Things Considered”, A national debt of $14 trillion? Try $211 trillion)
—Laurence Kotlikoff, Professor of Economics
“Everybody has decided that everybody is panicking. So everybody is screaming and getting up and running our of the theater.” (Boston Globe, An avalanche of worry)
— Laurence Kotlikoff, Professor of Economics
“What is surprising about the downgrade is not that it happened but that the administration was apparently taken by surprise when it did. After all, S&P had warned the markets in April that US debt was on watch for a possible downgrade. And that was long before Congress and the administration made a spectacle of themselves over the debt-ceiling issue.” (Boston Globe, OPINION: A ham-handed response from the White House)
— Cornelius Hurley, Professor of Law
