Despite claims that the government shutdown is a driving factor for the recent stock market drops, Victor Matheson, professor of economics at the College of the Holy Cross, tells Channel 3/NECN that people should instead be more concerned about the approaching debt ceiling deadline. He compares the current situation to the Lehman Brothers shutdown in 2008 with a default on $500 million debt, causing stocks to drop by fifty percent.
“What we have going down in two weeks is potentially the government not paying out on twelve trillion dollars of money, twenty five times bigger than Lehman Brothers. And so, the effects on the stock market there can be catastrophic,” said Matheson.
This Holy Cross in the News item is by Sara Bovat ’14.