Former Treasury Secretary Henry Paulson urged U.S. authorities on Thursday to prepare a contingency plan for a potential collapse in demand for government bonds before it’s too late.
“We need an emergency break-the-glass plan, which is targeted and short-term, on the shelf, so it’s ready to go when we hit the wall,” Paulson said during an interview on Bloomberg Television’s Wall Street Week with David Westin.
A Different Crisis Than 2008
Paulson, who led the Treasury through the 2008 financial crisis, said a U.S. debt crisis would be far harder to contain than the credit meltdown he managed then.
“When you hit the wall and you’re trying to issue Treasuries and the Fed is the only buyer and the prices of the Treasuries are going down and interest rates are up, that’s a dangerous …
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