Today I spoke with an economist who owns and heads an independent, forecasting boutique with many large enterprises, institutions and even governments of small countries as clients.
Even with such a weighty reputation, he has a mild reputation, in informal settings, for being deadpan and convincing, whilst absolutely taking the p***.
Yet in a way, which strangely and elliptically, hints at the truth.
In short, you could say he’s an ironist.
He expects The House to agree to raise the debt ceiling on a temporary basis, even for as much as six months, whilst postponing discussions about narrowing the deficit.
Here are the rather facetious but I think instructive steps in his reasoning:
- Everyone in Congress wants to get out of Washington, DC for their August recess.
- That’s why Treasury Secretary Tim Geithner informed them all that his agency will run out of cash on August 2.
- I think he could find the cash to pay the bills for another month.
- But by setting the deadline just before Congress goes on summer vacation, he increased the chances that they will raise the debt ceiling before they head out.
We should all go on holiday, frankly. And worry not.