American politicians should cease to use the debt ceiling in their negotiations, U.S. billionaire Warren Buffett said, comparing the practice to a nuclear bomb threat.
“It ought to be banned as a weapon. It should be like nuclear bombs, basically too horrible to use,” Buffett said in an interview with Fortune magazine, quoted by Bloomberg.
Republicans in the House of Representatives blocked the budget and federal funding measures for the fiscal year 2014 that started on October 1st, in an attempt to gain concessions on the Affordable Care Act. Lack of funding caused a partial blockage of the activity of the federal state, and the furlough of 800,000 government employees.
Congress is also also negotiating an increase of the U.S. debt limit. If the legislature does not adopt the measure by 17 October, the United States could go into default.
Charles Munger, vice president of the board of Berkshire Hathaway, the company run by Buffett, told Fortune that the threat of failing to honor the financial obligations of the country is deeply immoral and he was critical of the Republican Party, which he generally supports.
“We issue the reserve currency of the world. If my Republican friends keep doing this, they’re going to pay a terrible price,” said 89-year-old Munger.
Buffett, ranked fourth overall among billionaires and Munger are among the leaders in the financial sector who urged the Congress to stop using the U.S. debt ceiling as a political tool. Lloyd Blankfe, CEO and Chairman of Goldman Sachs said Wednesday after a meeting at the White House with President Barack Obama that the U.S. debt limit should not be used as a “cudgel.”
The current situation, with the U.S. close to reaching the debt ceiling, could serve as a lesson for politicians said Buffett .
“This may be like after we dropped a couple of atomic bombs. We saw that we didn’t want to do it again,” said Buffet.
Warren Buffett said Thursday that the he didn’t think the United States will not go beyond “extreme idiocy” in the dispute over the debt ceiling increase, but the Congress will resolve the deadlock before the problem was starting to seriously affecting the country.
U.S. Treasury has warned that it will run out by 17 October of all special measures used to buy time before reaching the current debt ceiling of $16,700 billion.