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US Moves Closer To Default: Speaker Refuses To Budge
US Moves Closer To Default: Speaker Refuses To Budge
The US government closed officially in the beginning of October, and is now no closer to coming to terms. In fact, the US government is moving towards the first default on the government’s debt structure in history.
President Barack Obama is blaming those in leadership roles for the government shutdown, with Speaker John Boehner being the number one target. The Treasury report states that right now they are “playing with fire” because a default on the present obligations within the national debt would be catastrophic, and totally unprecedented.
This would also extend the national debt to $16.7 trillion, and if a default does occur, the dollar value would plummet and the credit market would freeze.
“We’re not going to pass a clean debt limit increase,” Boehner, the top House Republican, said in a television interview. “I told the president, there’s no way we’re going to pass one. The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us.”
Private economists state that if no agreement is reached, a default would be extremely harmful to the already sagging US economy, and needs to be resolved quickly. Mark Zandi, chief economist of Moody’s Analysts, states that if the debt is not paid, it will assuredly be passed down to future generations.
“If they don’t pay on the debt, that would cost us for generations to come,” said Mark Zandi, chief economist at Moody’s Analytics. He said a debt default would be a “cataclysmic” event that would roil financial markets in the United States and around the world.
Treasury issued a report on Thursday detailing in stark terms what could happen if the government actually defaulted on its obligations to service the national debt.
“A default would be unprecedented and has the potential to be catastrophic,” the Treasury report said. “Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world.”
Right now, there is no internal cooperation in sight, but Treasury Secretary Jack Lew, reports that if the government would reopen, on Oct. 17 there would be approximately $30 billion cash on hand. The government’s payments and responsibilities run $60 billion a day.
On The Web:
US Moves Closer To Default
http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=171242:playing-with-fire-us-edges-closer-to-catastrophe&Itemid=3#axzz2h2ZkDu69
US moves closer to a possible default on debt
http://newindianexpress.com/business/news/US-moves-closer-to-a-possible-default-on-debt/2013/10/07/article1823069.ece