Republican leaders’ debt ceiling politics are a weapon of mass destruction of a different sort, according to Warren Buffett.
The billionaire investor told Fortune in an interview Friday that “it makes absolutely no sense” for politicians to use the debt ceiling as a threat to get their way on other legislation. Congressional Republicans, who have shut down the government over President Obama’s health care reform law, say they will use the debt limit as leverage to delay an important provision of Obamacare.
“It ought to be banned as a weapon,” Buffett said of the debt ceiling politics. “It should be like nuclear bombs, basically too horrible to use.”
If Congress doesn’t increase the country's borrowing power by October 17, the government won’t have enough money to pay its bills, according to Treasury Secretary Jack Lew. Lew said Republicans are “playing with fire,” noting Sunday on CNN’s “State of the Union” that Obama will have “no option” to pay the bills if the debt ceiling is breached.
Defaulting on the nation's debt could trigger a global financial meltdown. The nation’s $12 trillion debt is 23 times the amount Lehman Brothers owed at the time of its bankruptcy in September 2008, according to Bloomberg. In addition, a similar battle in 2011 cost the U.S. its top credit rating from Standard & Poor’s, hurt consumer and business confidence and shook the stock market.
So let’s hope Buffett's earlier prediction on the situation in Washington holds true.
“We will go right up to the point of extreme idiocy, but we won’t cross it,” the Oracle of Omaha told CNBC’s “Squawk Box” last week.