Treasury Says U.S. Default Potentially 'Catastrophic' -- FOX News
The Treasury Department said Thursday that a default by the U.S. on its debt caused by the ongoing budget standoff in Congress could have a “catastrophic” effect on the U.S. economy.
Given the already fragile state of the economy, the Treasury Department said in a report that default by the U.S. and its ripple effect through the global economy could lead to frozen credit markets, a plunge in the value of the dollar, skyrocketing interest rates, all of which could instigate a financial crisis mirroring that of 2008 “or worse.”
Congressional Republicans and Democrats are stuck in a stalemate over the 2014 budget, one that has helped lead to the first government shutdown in 17 years. That battle is widely expected to extend into the debate over a vote to raise the debt limit, which Treasury has said must be increased by mid-October or the U.S. will run out of money to pay its debts.
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Debt limit: Raise it or risk financial crisis, Treasury warns Congress -- Christian Science Monitor
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