The United States is courting calamity with the continuing stalemate in Congress over raising the country's debt limit, the World Bank's chief said on Friday. "Whatever the logic about the tactics, it's a very dangerous environment," Robert Zoellick told a meeting of the Society for International Development, adding that people were "playing with fire."
"To be blunt, to have a debt default in the United States would not only be a financial calamity but should be an embarrassment for every American" he said. Unless the $14.3 trillion debt ceiling is raised by Tuesday, the United States will lose its ability to borrow and start to run out of cash to pay its bills.
Efforts to avoid an unprecedented debt default suffered a new blow on Thursday when some fiscally hard-line Republicans blocked a budget deficit plan proposed by their own congressional leaders. On Friday, President Barack Obama said he was ready to work with top Democrats and Republicans through the weekend to get a debt ceiling accord.
Zoellick said the political stand-off in Washington was coming at a time when Europe faced fiscal difficulties and Japan was struggling with low growth and is trying to recover from an earthquake. "So you have an environment that's already fragile and uncertain," he said.
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