Fareed spoke recently with Lloyd Blankfein, CEO and chairman of Goldman Sachs, about the stalemate in Washington. Watch the full interview on "Fareed Zakaria GPS," this Sunday at 10 a.m. and 1 p.m. ET
What do you think the economic impact of what is happening in the Senate, the position of the House Republicans is, on markets and people’s understanding of the American economy?
Well, I say the confrontation and the way that confrontation is being carried out is, I think, a very bad impact on the markets and it's totally foreseeable.
Wherever you stand on the content, on the specific issues of what's trying to be accomplished, the idea of engaging away from the substantive argument after it's already been decided, and saying, you know, something will blow up the credit rating unless you accede to us, is just a poor policy and, I think, a poor demonstration. And, I think, a poor example of the American political process.
Are you actually worried that we will default?
I think it's very unlikely, because in this situation, sensibility normally prevails. But it's not an on-off switch. We’re already making people insecure. The markets are already responding. And some of the adverse consequences are already being felt. And it will continue to reverberate even if there's an acquiescence.
So it's already bad. If we actually went into a position of default…that would be very, very negative. But we're already getting some negative aspects at the moment.