Willett Advisors Chairman Steven Rattner Sees Government Shutdown
Steven Rattner, Chairman of Willett Advisors and former leader of the Presidential Task Force on the Auto Industry (the Obama Administration's Car Czar), detailed issues with raising the United States' debt ceiling, which he believes will lead to a government shutdown, on CNBC's Squawk Box Monday morning.
Rattner cited corporate earnings rising, but noted that those earnings are "driven by cost cuts" while the revenue line for the S&P 500 "has been close to flat," saying that "they've constantly missed their estimates." He said that the U.S economy has also had the same consistency missing growth estimates.
"I think people were talking about three percent growth by now. We're obviously not having three percent growth," Rattner said.
"And the mess in Washington, which will certainly get resolved at some point, I think, is going to create a pretty bumpy road over the next month or so. I don't think there's any question about that."
Rattner went on to say that he thinks a government shutdown is "more likely than not," going to happen.
He described a government at odds with itself, saying that both parties are fractured. Rattner noted that the United States is polarized, and the the parties are becoming more so as well, which is bad for running the country, he said.
"You have to separate the shutdown from the debt ceiling. They're two very, very different things We've had a lot of government shutdowns over the years," said Rattner, saying that about 20 happened over the two decades prior to 1996, the most recent shutdown.
"We know how to do that. That we can survive," Rattner added.
He said that a shutdown will probably lesson the chances of the U.S. defaulting on its debt.
"Once the government shuts downs, people start to focus and say 'Listen, we've got to deal with this'," Rattner said to defend the idea that a government shutdown will decrease the nation's chances of debt default.
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