The Obama administration is œincreasing the drumbeat” of a US default on its debt as a œscare tactic” to frighten bond holders worldwide and to pressure Congress into breaking a fiscal stalemate that has paralyzed Washington for over two weeks, an economist tells Press TV.
œThe American government will never default on a single penny of its bond obligations. It would be just too catastrophic for not only the American economy but catastrophic for the world economy,” Bill Still, director of The Money Masters said on Wednesday.
œAll this talk of default is just a scare tactic to scare not only Americans but bond holders around the world and to try to pressure the Congress to act one way or another” to pass a budget and raise the $16.7 trillion debt limit, he added.
Republican and Democratic leaders in the US Senate are reportedly œvery close” to announcing a deal on the nation™s budget and borrowing authority on Wednesday that would avert a default and reopen the government that has remained partially closed for 16 days.
Still noted that President Barack Obama could easily œquell these fears by saying that the US government will never default on its debt but instead the president continues to increase the drumbeat saying that default is possible.”
After efforts failed in the House of Representatives to forge a deal acceptable to both parties, the focus shifted back on the Senate to produce a plan to break the partisan gridlock.
The Senate™s last ditch effort was also given added urgency on Tuesday by a warning issued by the Fitch Ratings, the third largest credit rating agency, which put the US government on notice for a potential downgrade of the nation™s AAA credit worthiness.
HJ/HJ
Copyright: Press TV