Thread: Treasury Chief Jack Lew: Prepare for New World Order if US Defaults

Treasury Chief Warns of New World If US Defaults on Any Bills

Thursday, 25 Apr 2013 03:47 PM

The United States might run into trouble accessing debt markets if it defaulted on any of its financial obligations, even if it were able to keep up payments on government bonds, Treasury Secretary Jack Lew told Congress.

Lew was responding to questions about a bill in the U.S. House of Representatives that would prioritize payments on government bonds and Social Security if the United States hits its debt limit, in order to avoid a credit default.

If passed, the law would make it easier for Republicans to use a fight over the nation's legal borrowing limit, known as the debt ceiling, to try to extract spending cuts from President Barack Obama.

"The thing I would urge you to consider is, you enter a world we've never been in once the United States is not meeting its obligations," Lew told a House subcommittee. "We cannot assume markets will function in an orderly way if that (happens)."

The current suspension of the debt limit expires on May 19, although the Treasury can use emergency cash-management measures to push off the day of reckoning into August. The date could fall even further in the future given unexpectedly strong tax revenues and the possibility of a big payment to the Treasury from housing finance giants Fannie Mae and Freddie Mac.

Lew has said it is impossible to try to pinpoint when exactly the use of these emergency maneuvers would be exhausted due to a delayed tax filing season and uncertainty about the effect of steep government spending cuts known as the sequester.

Once the United States reaches its debt limit, the government faces the prospect of defaulting on financial obligations, and potentially its debt, which could shake up markets and damage the economy.

Staff at the International Monetary Fund warned that failure to smoothly raise the U.S. debt ceiling could do serious damage to the global economy.

© 2013 Thomson/Reuters. All rights reserved.

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Fed Chairman Ben Bernanke listens to Treasury Secretary Jack Lew at a meeting of the Financial Stability Oversight Council last week in Washington. The session was held to discuss the financial markets and emerging threats to financial stability. (Photo by Mark Wilson/Getty Images)

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Our National debt is a serious problem. Yet; they want to bring a undetermined amount of immigrants and spend billions of burrowed money to do it. Why now? Why not secure the boarders and deal with the National debt first and worry about our own economy or have they given up on it? We can't afford the additional resources that will be needed to put any type of immigration program into action. Politicians need to put their ducks in a row and start dealing with the problems we all ready have instead of crreating more.

We have 5 US banks holding 95% of the derivatives in our country. They have refused to rain them in simply because we keep raising the debt ceiling. It's time to end this.




Edit: I read the Amnesty Bill will cost us 2 Trillion dollars.

I believe it, But then you have to remember that the Government never figures anything right. Always over budget and underfunded.