The head of the International Monetary Fund (IMF), Christine Lagarde, has warned that the clock was ticking on a US debt deal, as the dollar slid to new lows amid concerns of a looming and unprecedented default by the world’s top economy.
US President Barack Obama, in a solemn late night address to the nation, hit out at what he called a “dangerous game” being played by rival Republicans with the two sides deadlocked over a deal to raise the debt ceiling by August 2.
“We can’t allow the American people to become collateral damage to Washington’s political warfare,” Obama said on Monday in his White House address, and warning of a “deep economic crisis” if the US defaults.
For weeks Obama’s Democratic allies have been at loggerheads over a deal with Republicans, who control the House of Representatives, to raise the US $14.3 trillion debt ceiling and agree on ways to cut the ballooning US deficit.
Republicans have called for a raft of deep spending cuts – which Obama has agreed to – but emboldened by newly elected arch-conservative Tea Party lawmakers they have refused the president’s calls for matching revenue increases from the nation’s wealthiest.
Lagarde, the new head of the International Monetary Fund, waded into the debate Tuesday urging the two sides to find a compromise, as both parties touted rival plans.
“The clock is irremediably ticking, and people really have to find a solution,” she said in New York.
She warned a default “would be a very, very, very serious event. Not for the United States alone, but for the global economy at large.”
Agence France Presse – ndtv.com
2 Responses
What is and was Bin Laden’s (Al quida) goal with the US? The only logic answer that I can think of is to criple the US economy.
After years, the US has eventualy sorted out Bin Laden but the “nuckle-heads” in the House
can not realise that Bin’s Ladens goal will succseed if the debt sealing does not get sorted out.
Regards
Loot
Posted on July 29th, 2011 at 2:35 pm
I am hoping for Aug. 2 to arrive without an agreement and or budget. Treasury has enough to pay for the bonds and notes that come due in August. The contributory programs Social Security and Medicare should have painful but not devastating cuts for the month because they have dedicated revenue inflows. Same with the Transportation gas taxes for roads and payback of student loans and others with dedicated incomes. The true give away programs to big oil, agribusiness, military retirement, and others with no income (ever) would have to absorb the big (45%?) cuts. That includes grants to States including Medicaid. And the Pentagon. At the end of the month, the President can look around the table and see who is whining, and then begin to play Texas Hold’em with conviction: go “all in” and demand tax increases from the super rich and corporations. The new business mantra “Greed is good” is made possible by the low tax rates on business initiated by President Reagan and pushed even lower by President Bush. Businessmen who wanted to put profits into increasing the “book value” and who were community builders have been displaced by men who place executive compensation and dividend payout above everything else. We see this in outlandish CEO paychecks, ever increasing wealth among the top “unearned income” millionaires, and the decreasing “book value” of Corporate America as factories and jobs are sent overseas. Rates below 50% (35 corporate plus 15 dividend) encourage this type of business conduct. Our tax code can protect 100% of profits when those profits are used to build jobs. Our tax code is a carrot and stick. Use the stick! Return the rates to the Eisenhower era 60-85% range. Coerce business to invest. The President must choose this course or America will founder as it’s economic life is plundered by the super rich.
Posted on July 31st, 2011 at 4:59 pm
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