Christine Lagarde, the first woman to lead the IMF, called for the United States to increase the debt ceiling and raise the borrowing limit. She says she predicts “real nasty consequences” for the United States economy and the global economy upon failure to do so.
“If you draw out the entire scenario of default, yes, of course, you have all of that — interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries,” she said.
The current limit, which was met back in May is $14.3 trillion, and Obama officials have said failure to reach a deal by July 22nd and the limit raised by August 2nd would result in the United States defaulting. Talks resumed Sunday to work out a U.S. Debt Deal as the deadline approaches after Speaker John Boehner rejected the previous Democrat Debt Plan proposal which included $2 trillion worth of tax increases.