June 20, 2011, 11:48 a.m. EDT
Street economist says default better than cuts
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Bank reserves swelling, and commodity prices surging — that’s the situation that the U.S. economy is now confronting.
But it also was the case back in 1937. And that’s what worries Ethan Harris, North American economist at Bank of America Merrill Lynch.
He fears, now like then, that tightening of monetary and fiscal policy could cause a recession, so much so that he thinks a temporary default on U.S. Treasury obligations may be preferable to overly swift spending cuts.
His view stands at odds with the rest of Wall Street, which has frequently communicated to congressional Republicans as well as the White House their desire to see the $14.3 trillion debt ceiling increased.
Full story: http://www.marketwatch.com/story/temporary-us-default-may-be-better-economist-2011-06-20
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