In a CNBC interview today, Warren Buffett likened the debt ceiling to a “political weapon of mass destruction” being used against the American public. Like poison gas and nuclear weapons, the debt ceiling is “too powerful” and Congress "shouldn't touch it," he said.
Buffett’s warnings add to the already-heated rhetoric around the debt ceiling debate that’s griped Congress in the days leading up to Oct. 17 – when the Treasury says the U.S. government will run out of cash to pay its bills.
As the Senate readies for a last-ditch attempt to end the stalemate, here's a rundown of what some of the nation's top lawmakers, CEOs, business leaders and pundits have said about the potential for a U.S. default.
Warren Buffett, Chairman of Berkshire Hathaway, in an interview with Fortune magazine:
Fighting over the debt ceiling “ought to be banned as a weapon. I mean it should be like nuclear bombs, basically, too horrible to use… and both parties should say – we’ve both sinned in the past. All the past behavior has been idiotic, we won’t debate who’s been more idiotic, but it’s over.”
Jamie Dimon, CEO of JP Morgan
During a discussion held by the Institute of International Finance, a leading forum for the world's banks, Dimon was asked what would happen if the U.S. is forced into default because Congress did not raise the borrowing limit; he said: "You don't want to know… It would ripple through the world economy in a way that you couldn't possibly understand."
Rep. Ted Yoho, R.-Fla.
“I think we need to have that moment where we realize [we’re] going broke. If the debt ceiling isn’t raised, that will sure as heck be a moment. I think, personally, it would bring stability to the world markets,” since they would be assured the United States had moved decisively to curb its debt.
"Not raising the debt ceiling is not an automatic trigger for a default," Yoho said in an interview. "I want to say that again, so you get it right. Not raising the debt ceiling is not an automatic trigger for default."
Bill Gross, manager of Pimco, in Bloomberg TV interview
“The U.S. Treasury is the center of the global financial complex. A default -- unimaginable, but if it happened it would set into motion a complex series of events that affect not just bonds but credit transactions on a worldwide basis – equity prices, commodity prices. You just don’t want to see that happen… and I don’t think it will.”
Mohamed El-Erian, CEO and CIO, Pimco in a Q&A with Business Insider:
“The last thing America’s still-sluggish recovery needs is a sinkhole of our politicians' own making. Yet this is what it would get if Congress does not lift the debt ceiling in a timely manner. While we think that, when push comes to shove, our politicians will come to their senses, we have analyzed the possible consequences of a failure to do so. The bottom line is a simple one: cascading financial market dysfunction, an economy back in recession, higher unemployment, and greater global economic and financial instability.”
Sen. Chuck Schumer on CNN:
“The debt ceiling is such a calamitous possibility that you could go into a recession or even a depression worse than Lehman Brothers and AIG in 2008," Schumer said on CNN.
Dennis Hoffman, economics professor, Arizona State University’s W.P. Carey School of Business:
“This would be a financial collapse and chaos unlike anything anybody has seen before. It’s unthinkable.”
Rep. Nancy Pelosi, D.-Calif.:
"Not lifting the debt ceiling is like unleashing a torrent, a river of no return. It’s beyond cataclysmic."
Syndicated conservative columnist George F. Will on Fox News:
Responding to the question of whether President Obama can stick to a “refusal to negotiate”: “"Here’s the position he would be sticking to: Default would be catastrophic — world-wide depression, political chaos, locusts, plagues, et cetera. But attach to the debt-ceiling construction of the Keystone pipeline, it’s better to have locusts, plagues, crisis, and war. It’s an untenable position... But what makes the debt ceiling, this recurring crisis so wholesome is it forces us to confront a gap between revenues and outlays.”
Larry Fink, CEO of BlackRock, asset manager, on CBS This Morning:
“It's like somebody going to the bank after having a car loan or mortgage loan and going to the bank and saying, 'I'm not going to pay you.' Now do you think the next time you're going to need a loan, that bank is going to give you that money? And so we are a country that is very dependent. About 25 percent of our debt is dependent on foreign sales, and so China and Japan are principally large owners. What I worry about is that narrative is going to harm us long-term.... If we do default, this will probably be much larger than Lehman Brothers.”
“We’re going into the holiday season, and everyone I know is going to defer their decisions… we know individuals are going to defer and wait until how this plays out. The bigger issue is CEOs. CEOs are not going to invest in jobs, they’re not going to invest in plants and equipment. They’re going to hold back. We have an unquestionable poor-job economy, and we’re only going to make it worse.”
Sir Martin Sorrell, CEO of British ad firm WPP:
“If you were running a company like this, and stopped paying your workers, you’d get fired. [Shutdown] is almost like going into Chapter 11 or bankruptcy. The Americans I talk to are frustrated and embarrassed,” he said. “[The] impact on Brand America is not good at all.”
AT&T Chairman and CEO Randall Stephenson, in a statement:
"It is unthinkable that the United States could default on its financial commitments, and it would be the height of irresponsibility for any public official to consider such a course."
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