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Debt Overshadows Economy, Bin Laden Death: Stockman

Monday, 2 May 2011 | 1:45 PM ET

The United States can't make too many conclusions about what the death of al Qaeda leader Osama Bin Laden might mean for the economy, the political process or decision-making in Washington, David Stockman, former OMB director under President Reagan, told CNBC Monday.

Saudi-dissident Osama Bin Laden sits on floor with his AK-47 rifle in his hide outs in Afghanistan 08 November, 2001. Osama bin Laden in an interview with a Pakistani newspaper denied reports he had been hospitalized in Dubai for kidney treatment.
Getty Images
Saudi-dissident Osama Bin Laden sits on floor with his AK-47 rifle in his hide outs in Afghanistan 08 November, 2001. Osama bin Laden in an interview with a Pakistani newspaper denied reports he had been hospitalized in Dubai for kidney treatment.

"The problem is still there: a massive debt and a debt ceiling coming due in June, and no consensus whatsoever between the parties as to how we begin to get this under control," Stockman said.

The economy is not really in recovery, he added. "[It's] totally medicated with fiscal and monetary stimulus that is now coming to an end."

In addition, he went on to say that the real investors are going to be "repricing the risk that we have fiscal dysfunction and failure in this country."

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"When they do that, I think we are going to have a different picture in this country as we move forward in time," added Stockman.

"The most important thing we've heard in the last week or two that PIMCO is short the bond. They're a real investor and the bond market is going naked in June," he said.

"We can rejoice when an event like this occurs, (Bin Laden's death) but we also need to get back to business and finally start facing up to the real problems of the country," Stockman concluded.

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