Rivlin Warns Debt Crisis Possible

Former budget chief Alice Rivlin warns if Congress does not raise revenues or cut spending a growing economic crisis is in the offing, Politico reports.

“We could definitely have what's called a sovereign debt crisis,” Rivlin said Sunday on CNN’s “State of the Union.” “We used to think that only happened to small countries on other continents but it could happen to us as well.

“That means that we would not be perceived as able to get our act together and pay our debts, and our creditors would lose confidence in us,” President Bill Clinton’s budget director said, adding a sovereign debt crisis would result in a large interest rate spike, a fall in the global value of the dollar. and a period of economic decline much worse than the recession that began in 2008.