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News Link • Government Debt & Financing

White House warns of debt ‘Armageddon’

• The Raw Story
 The White House warned Republicans on Monday that failing to raise the $14.29 trillion US debt limit would spark "Armageddon-like" consequences for the slowly recovering US economy.

As a new political showdown looms over the economy following a defused budget row last week, aides also said that President Barack Obama now realized his vote as a senator against raising the debt ceiling in 2006 was a mistake.

"The consequences ... of failure to raise the debt ceiling would be Armageddon-like in terms of the economy," said White House spokesman Jay Carney.

Congress must raise the US debt limit, or the maximum amount the Treasury is allowed to borrow, by May 16 or see the United States default on interest payments of its debt.

But the move has become embroiled in fiercely partisan battles over the economy and spending.

Carney warned that the result of failing to raise the debt ceiling were so grave, it would be irresponsible for politicians to exploit the drama for political gain.

"We don't need to pay chicken with our economy by raising the debt ceiling," said Carney.

However, Republicans who control the House of Representatives are demanding vast new spending cuts from Obama -- over and above the 38 billion dollars agreed to end the budget row last week, in exchange for raising the debt limit.

2 Comments in Response to

Comment by Powell Gammill
Entered on:
White House warns on debt limit, says Obama regrets vote

Comment by Mike Saintforest
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Here is the solution to the whole debt situation for the US.  TAX the Federal Reserve Bank.  $50B per day starting 1/1/11 should finally even the score.  They are the only organization that can make money from thin air so they should claim no hardship.  A few months of this tax will put Social Security and all our other programs back in the black.  After a year or so, there would be NO national debt.  Happy spending.

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