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Debt Debate Will Be 'Cathartic' in Long Term: McCulley

Paul McCulley told CNBC Friday that if he was still a portfolio manager at Pimco he would be "very concerned" in the short term about the inability of Congress and President Obama to reach an agreement on the U.S. debt ceiling by Aug. 2.

But in the long term, McCulley said, "it wouldn’t disturb me, it would actually make me somewhat positive."

Retired from the bond manager and now with the Global Interdependence Center, McCulley said that in a democracy "ultimately you need to have cathartic moments where you debate the long-term fiscal future, and we’re having it right now."

Democracy, he added, "is not an efficient process. You are seeing it at the height of inefficiency right now but ultimately we need to have this debate about how we’re going to restructure our economy for an aging society in a global framework."

If he was still at Pimco he would play Treasurys as the "ultimate safe-haven asset, notwithstanding all this debate about ratings and so forth. It’s not about the ability of Uncle Sam to meet his debts, it’s about political willingness at this particular juncture."

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