Buffett Says Debt-Ceiling Politics Should Be Banned Like A-Bomb

October 5, 2013 Leave a comment

Buffett Says Debt-Ceiling Politics Should Be Banned Like A-Bomb

Billionaire investor Warren Buffett said politicians should stop using the nation’s borrowing authority as a bargaining chip in policy debates, comparing the practice with the threat of dropping a nuclear bomb. “It ought to be banned as a weapon,” Buffett, 83, said in an interview with Fortune magazine posted online today. “It should be like nuclear bombs, basically too horrible to use.”Republicans in the U.S. House stalled government-funding measures in an effort to delay or curtail the Affordable Care Act, President Barack Obama’s signature health-insurance law. The inaction led to a partial government shutdown this week and the furlough of about 800,000 employees. Congress is also debating whether to raise the government’s borrowing authority. Failing to do so by Oct. 17 could trigger a default.

Charles Munger, the vice chairman at Buffett’s Berkshire Hathaway Inc. (BRK/A), also appeared in the Fortune video. He called the threat of defaulting on the country’s obligations “deeply immoral” and criticized the party he has supported.

“We issue the reserve currency of the world,” Munger, 89, said. “If my Republican friends keep doing this, they’re going to pay a terrible price.”

Buffett, the world’s fourth-richest person, and Munger are among financial leaders urging Congress to stop using the nation’s borrowing authority as a political tool. Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said Oct. 2 after a meeting at the White House that the debt ceiling shouldn’t be used as a “cudgel.”

Buffett, who said yesterday on CNBC that he didn’t think politicians would go beyond the point of “extreme idiocy,” told Fortune that the standoff could serve as a lesson.

“This may be like after we dropped a couple of atomic bombs,” Buffett said. “We saw that we didn’t want to do it again.”

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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