Governor Robert Bentley referred to the debt-ceiling as "sacrosanct" saying Congress should not even hold a debate on the matter.
"We cannot do anything that will hurt our credit rating in this country so the debt ceiling is probably off-limits. Hopefully it will be." Gov. Bentley said after he chaired a meeting of the State Board of Veteran's Affairs.
Gov. Bentley said he understands the position that House Republicans took in their effort to stop the federal healthcare law but added, "The shutdown is different."
One of the state's leading economists agrees with the governor.
Dr. Keivan Deravi works for Auburn University-Montgomery, and has consulted on the state's budgets and economic development projects for decades. Deravi contributed to the efforts to recruit Mercedes-Benz to Tuscaloosa, Hyundai to Montgomery, and the recent effort that landed Airbus in Mobile.
"As an economist, I cannot comprehend and I cannot understand the real consequences of what may happen because we have never been exposed to such reckless practice" Deravi said during an interview.
In his estimation, the growth in Alabama's economy would be halted or even reversed in the event Congress doesn't raise the debt ceiling. Deravi described the possible result as "negative growth" or put another way, the state's economy would shrink after modest gains in GDP of approximately 3% over the past few years. The stakes are high for the country during this debate, Deravi said.
The country is on pace to reach its borrowing limit by October 16 or 17. The government has been shut down since Tuesday morning and there are reports in Washington that House Republicans may attempt to negotiate the raising of the debt ceiling during discussions to reopen the government.
The governor believes the country doesn't have any options when it comes to raising the country's borrowing limit.
"You cannot say that we cannot borrow anymore money because we have to in order to get through this difficult time" Gov. Bentley said. "Now we have to cut, but the debt ceiling is a little bit different.
Deravi with AUM agrees.
"Our prestige, our image as the world's financial police will be highly questioned" he said. "One of the reasons the dollar is the world's currency is because we have always been able to handle the world crisis with grace, muscle and brain, now we're about to lose the grace, the brain and the muscle."
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