Governor says debt negotiations a 'game of chicken'

Monday, July 25, 2011 at 4:33pm

Gov.  Bill Haslam called the U.S. debt negotiations “an incredibly serious game of chicken” Monday and urged Washington to reach an agreement “for the economic health of the country.”

“We have a country that’s literally waiting to see what will happen,” Haslam told reporters. “Until Washington shows that we can live within our means and come to a political agreement about how to solve that, you’re not going to see banks willing to loan money, you’re not going to see people willing to invest their own capital, and so we won’t have any job growth until that happens.”

Moody’s Investors Services told Tennessee and four other states last week that they face downgrades in their AAA credit ratings because of their heavy dependence on federal revenue.

“Should the U.S. government’s rating be downgraded to Aa1 or lower, these five states’ ratings would likely be downgraded as well,” the bond-rating agency said.

Haslam said: “It’s an incredibly serious game of chicken that we’re playing in Washington, quite frankly. If you talk to any governor, they would say, we really need you to solve this for the economic health of the country, No. 1. No. 2, for us as states — I mean, you’ve seen where some of the credit ratings agencies have said, the fact that they don’t have a deal puts Tennessee’s credit rating in peril. That speaks volumes.” 

But Haslam repeated his belief that state government could weather higher borrowing costs.

“We have the second- or third-lowest debt load of any state out there, and that’s really helpful in times like this,” he said. 

5 Comments on this post:

By: govskeptic on 7/26/11 at 6:27

This is the same Moody's of course that told the World's investors that the
junk Real Estate paper being spread worldwide by Goldman-Sachs and
Bear Stearns and others that these were AAA rated. This is a serious
situation that our country and economy has never faced before so what the
consequences will truly be will hopefully not be tested. Certainly there has
been enough Press Coverage to let us know the Sky will fall, rivers will rise,
and pace makers will shut off if we don't continue to spend way beyond our
means! So, borrowing .42 cents of every dollar spent needs to be increased.
Disgusting behavior by congress, the administrations, and nation!

By: gohomenow on 7/26/11 at 11:08

Does anyone else find it disgusting that a politician looks at negotiations over the handling of taxpayers' money as a "game" ?? I myself find it disgusting, but not surprising.

By: Moonglow1 on 7/26/11 at 11:40

Moonglow1: the debt ceiling needs to be raised as it has been under every other president including Reagan and Bush. The USA is obligated to pay its debts and to not default. By getting out of the unilateral wars started by Bush we will be saving about $1 trillion per year. The drama around raising the debt ceiling this year is all about political posturing. Apparently under Bush, he sent members of Congress a one sentence request to raise the debt and it was raised. Even tea party queen Marsha Blackburn voted for the increase. So why the drama now?

By: pswindle on 7/26/11 at 12:27

So our bright Governor has a word of wisdom. Run for the hills!

By: FLeFew on 7/26/11 at 1:32

There is a serious debate in Washington about the future of the country and our Governor calls it a "game of chicken"????

He must not have a deep rooted conviction about the spending of our tax dollars. I bet he thinks there should be a "balanced" agreement which (when decoded) means increased taxes.

Will we soon see him throwing away our money on his "bunker-like" project?

He is not like some of us who scrape to pay our taxes and still get along.