Sen. Bob Graham: “What Mr. Hormats is saying is that once people have some confidence that we are about to deal with this deficit issue on…”

“What Mr. Hormats is saying is that once people have some confidence that we are about to deal with this deficit issue on a sustained and serious basis, it had an almost immediate effect in terms of building up the confidence of people to make long-term decisions. One of the consequences of that was a lowering of interest rates. Our failure to demonstrate a continued resolve toward that direction is likely to unravel the benefits that we have already gained. We have seen within the last few days another slight uptick in short-term interest rates. We need to send a strong signal now that indicates that we have not lost our commitment to continue deficit reduction so that that small tick will not become an avalanche of increasing interest rates, increasing inflation, lowered economic growth, and lowered standard of living for our people. Finally, I think the reason we need to be concerned about the deficit is because it is fundamentally immoral for one generation of Americans to pass its economic responsibility to the next.”