Geithner Warns Lawmakers of Debt Calamity

Treasury Secretary Timothy Geithner warned at a White House meeting Thursday that not raising the debt ceiling soon would have drastic consequences, reports the Wall Street Journal.

Geithner reportedly told lawmakers gathered at the White House that there is no Plan B alternative Treasury could pursue to avoid default, warning of an immediate economic crisis that would reach around the world -- if the borrowing limit isn’t raised.

Meanwhile, officials have been watching bond markets to detect any anxiety about the progress of political talks. Equity and currency markets could also react unpredictably if investors become convinced the U.S. government is defaulting on its debts.

A veteran of most deficit-reduction talks between the White House and Capitol Hill, the Treasury chief has remained acutely concerned about the debt ceiling, saying if the ceiling isn’t raised by Aug. 2, the country could begin defaulting on its obligations.