The Shutdown Is A Sideshow. Debt Is The Threat -- Niall Ferguson, Wall Street Journal
An entitlement-driven disaster looms for America, yet Washington persists with its game of Russian roulette.
In the words of a veteran investor, watching the U.S. bond market today is like sitting in a packed theater and smelling smoke. You look around for signs of other nervous sniffers. But everyone else seems oblivious.
Yes, the federal government shut down this week. Yes, we are just two weeks away from the point when the Treasury secretary says he will run out of cash if the debt ceiling isn't raised. Yes, bond king Bill Gross has been on TV warning that a default by the government would be "catastrophic." Yet the yield on a 10-year Treasury note has fallen slightly over the past month (though short-term T-bill rates ticked up this week).
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My Comment: The key sentence in this commentary is the following ....
.... As anyone can see who reads the most recent long-term budget outlook—published last month by the Congressional Budget Office, and almost entirely ignored by the media—the question is not if the United States will default but when and on which of its rapidly spiraling liabilities.
Niall Ferguson's analysis is correct .... but for the moment .... no one cares.
Update: Correction .... there are some who do care .... and they are now deeply worried.
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