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Gov. Scott: U.S. Default Impact Would Be Minimal

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(Source: Executive Office of the Governor)

(Source: Executive Office of the Governor)

Miami Dolphins

MIAMI (CBSMiami.com) – Governor Rick Scott has weighed in with his thoughts on the federal debt ceiling. Scott is in favor of letting the U.S. default instead of raising the debt ceiling.

“The impact would be minimal,” Scott told CBS4 news partner the Miami Herald.

Scott’s dismissal of the potential default of the U.S. government is because he feels that it would have little to any impact on state government or the financial markets.

However, Moody’s has already threatened at least five states with a credit rating drop if the federal government goes into default. Florida isn’t one of those states, but a federal default could bring mass chaos to Wall Street and the bond markets.

The last time bond markets were severely rattled was after Lehman Brothers collapsed in 2008. That event, along with others, is part of what sparked the Great Recession and the jobless recovery.

But Scott isn’t fazed by the warnings coming from Wall Street and the Treasury Department.

“I don’t think anybody knows, because it’s never happened,” Scott told the Herald. “I believe the markets understand where the federal government is. They understand where the spending is, so I think the market has already priced it (default) in.”

Scott said if he were in charge he would not raise the debt ceiling and instead restructure the government to determine how money is being spent.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Miami Herald contributed to this report.)

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