Former President Bill Clinton "inadvertently misspoke" at a fiscal policy conference, May 25, 2011.
Former President Bill Clinton "inadvertently misspoke" at a fiscal policy conference, May 25, 2011. Jacquelyn Martin/AP
It was more than passing strange when former President Bill Clinton said Wednesday that the nation could endure a short default on its debt without a calamity ensuing.
His precise words at a fiscal summit hosted by the Peter G. Peterson Foundation were:
"If we defaulted on the debt once for a few days, it might not be calamitous. But if people thought we were literally not going to pay our bills anymore, then they would stop buying our debt."
The statement astonished on at least two counts. First, many experts think a default if Congress fails to raise the debt ceiling, even if brief, could have catastrophic.
They say it would shatter the time-tested trust of the world's investors that the U.S. pays its debts, introducing all kinds of unprecedented uncertainties into global financial markets.
Second, Democratic policymakers have said as with one voice that a default is unthinkable. It's some Republicans who have downplayed the effects of a U.S. default.
But there he was, the last president to govern during a time of peace and prosperity, The Big Dog, saying the exact opposite. It was quite something.
Clinton later issued a statement on Wednesday following his off-message remark. It was all a mistake.
As Laura Meckler and Damian Paletta of The Wall Street Journal reported:
In the statement, Mr. Clinton's spokesman, Matt McKenna, said the former president "inadvertently misspoke" and "did not in any way mean to suggest that a default would not be highly damaging for the economy even for a very short period of time."
"What he meant to say was that if a vote to extend the debt limit failed in advance of a default, that might not be harmful for a couple of days, but that if people thought that we might actually default, that in his words 'we were literally not going to pay our bills anymore,' then they would stop buying our debt."
Meckler and Paletta reported Thursday that statement came after White House officials asked the former president to retract his earlier comment.
After hearing Mr. Clinton's comments on Wednesday, White House Chief of Staff Bill Daley and Gene Sperling, director of the National Economic Council, spoke with aides to Mr. Clinton and advised that he clarify his thinking, two people said. The former president did so that afternoon.
Both Daley and Sperling worked in the Clinton Administration, the former as Commerce Secretary, the latter as an economic adviser. So it wasn't the first time they had to do damage control for him.
Maybe it was just some weird form of symmetry involving major political figures from the 1990s. Newt Gingrich, the Republican House speaker when Clinton was president, recently gave Democrats a gift when he called the House GOP's proposal to privatize Medicare "right-wing social engineering" which he later retracted.
Now Clinton has had to retract his gift to the House GOP.