Pulling all that money out of the economy during a downturn is not a desirable outcome, Toomey said, but ultimately not all that bad.
“It is very disruptive, I don’t think it’s going to have an adverse impact on the economy for the days or weeks or perhaps even months that this would continue,” he said. “I doubt it would be that long. I doubt that it would be disruptive to the economy per se. But it would be disruptive, certainly, to the people who are accustomed to and relying on the programs that would necessarily be cut.”
Global markets recoiled on Friday after U.S. lawmakers failed to break their debt-ceiling deadlock, raising concerns that the world’s largest economy could heading for a default, and both Canada and U.S. posted disappointing economic data.
In Toronto, the benchmark S&P/TSX composite index plunged 153.64, or 1.18 per cent, to 12,894.14.
In the U.S., the Dow Jones industrial average sank 141.52 points, or 1.16 per cent, to 12,098.59 while the Nasdaq composite index dropped 40.54 points, or 1.47 per cent, to 2,725.71.
Overseas markets were also lower on Friday. London’s FTSE 100 index was down 89.52 points, or 1.52 per cent, to 5,783 at midday. Frankfurt’s DAX had lost 107.71 points, or 1.50 per cent, to 7,082 and the Paris CAC was down 76.38 points, or 2.06 per cent, to 3,636/28.
In Asia, Tokyo’s Nikkei stock average finished down 68.32 points, or 0.69 per cent, to 9,833.03 and Hong Kong’s Hang Seng index fell 130.49 points, or 0.58 per cent, to 22,440.25.
So when you’re watching your retirement savings take a nosedive over the next few days, keep in mind that Senator Pat Toomey, of Pennsylvania, says it’s no big deal.