Failure to raise U.S. debt ceiling would be worse than shutdown: IMF head
The head of the International Monetary Fund, Christine Lagarde, warned Thursday that failure to raise the U.S. debt ceiling would pose a greater threat to the global economy than the current government shutdown.
Speaking ahead of annual World Bank and IMF meetings in Washington next week, Lagarde said that it is "mission critical" to resolve the issue as soon as possible, and that the U.S. government needs to fix its finances for the long term.
Unless the debt limit is raised, Washington will run out of cash to pay its bills on October 17th, which the U.S. Treasury claims could lead to a financial crisis as bad as 2008, or even worse.
The government shutdown is the result of a budget standoff between U.S. President Barack Obama and Congress.
Stretching into its fourth day, the shutdown has left more than 700-thousand federal employees on unpaid leave and closed national parks, office buildings and government websites.
Top policy makers of the U.S. and international financial institutions have also voiced their concerns that a failure to raise the debt ceiling would bring catastrophic consequences for the global economy.
Officials fear that not raising the debt limit could bring about a shock on Wall Street and a surge in borrowing costs for businesses and households.
Meanwhile, House Speaker John Boehner has reportedly told his Republican colleagues that he will not allow the U.S. to default on its debt and he is willing to do all that he can to avoid it.
One U.S. lawmaker, who spoke to the NY Times on the condition of anonymity, said that Boehner was willing to pass a debt-limit increase despite opposition by conservative Republicans.
Kim Min-ji, Arirang News.