Tags: Millstein | Raising | Debt | Ceiling | Worse | Lehman | Collapse

Millstein: US Default Will be Worse Than Lehman Collapse

Thursday, 14 Apr 2011 09:06 AM

Lawmakers must raise the $14 trillion debt ceiling, as failure to do so could inflict more damage on the U.S. economy than the collapse of Lehman Brothers, says Jim Millstein, former U.S. Treasury chief restructuring officer.

"There are a lot of people talking about this debt ceiling of being no consequence, and we can blow right by it without any consequences, and I just think it's nuts," Millstein tells CNBC.

"If we fail to increase the debt ceiling then the Treasury Department can scramble for a couple of weeks, a couple of months maybe, before it would otherwise hit that ceiling, and then we are in default," Millstein explained.

Default, Millstein says, would have "extraordinary" consequences for the United States.

"This would make the Lehman Brothers bankruptcy look like a walk in the park on a sunny day — they are really playing with fire," Millstein adds.

The country's debt level is currently $81 billion shy of the $14.294 trillion debt ceiling.

mitchmcconllgetty200.jpg
Mitch McConnell
(Getty photo)
Democrats want it raised, and Republicans say they are against doing so without installing spending limits to accompany such a measure.

"We're going to require as a condition for raising the debt ceiling something really important about the debt," says Senate Minority Leader Mitch McConnell, R-Kentucky, according to CNN.

Tax hikes are ruled out.

"From my point of view, taxes are not on the table because we don't have a revenue problem, we have a spending problem," McConnell says.

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Lawmakers must raise the $14 trillion debt ceiling, as failure to do so could inflict more damage on the U.S. economy than the collapse of Lehman Brothers, says Jim Millstein, former U.S. Treasury chief restructuring officer. There are a lot of people talking about this...
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Thursday, 14 Apr 2011 09:06 AM
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