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US debt limit: Republicans playing a risky game

Business Times - 08 Jul 2011


US debt limit: Republicans playing a risky game

By LEON HADAR
WASHINGTON CORRESPONDENT

THERE is a general agreement in Washington and Wall Street that the US is in real risk of defaulting on its debt if Congress fails to approve legislation that permits the federal government to exceed the current national borrowing ceiling of US$14.3 trillion by the beginning of next month.

In fact, Obama Administration officials insist that Republican and Democratic lawmakers need to agree on a deal by July 22 in order to allow for enacting the necessary legislation before the Aug 2 deadline.

In the aftermath of the Great Recession and at a time when the recovery of the US economy remains in very slow motion and the global economy is threatened by ongoing political and economic crises in the eurozone and in the Middle East, you would assume that US legislators would put in place a deal to ensure the US can meet its financial obligations - and as soon as possible. It should be…