US President Barack Obama affirmed Tuesday that as "reckless as a government shutdown is," the economic shutdown caused by America defaulting would be "dramatically worse." The US government is getting closer to defaulting on its debt for the first time in history, where the deadline is set for October 17 while the government shutdown has entered its second week.
Obama said in a news conference "there are enough reasonable Republicans and Democrats in the House who are willing to vote yes on a budget that the Senate has already passed. That vote could take place today. The shutdown would be over. Then serious negotiations could proceed around every item in the budget.
"Now, as soon as Congress votes to reopen the government, it's also got to vote to meet our country's commitments, pay our bills, raise the debt ceiling, because as reckless as a government shutdown is, the economic shutdown caused by America defaulting would be dramatically worse," he stressed.
He warned that if Congress "refuses to raise what's called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years.
"Warren Buffett likened default to a nuclear bomb, a weapon too horrible to use. It would disrupt markets, it would undermine the world's confidence in America as the bedrock of the global economy, and it might permanently increase our borrowing costs which, of course, ironically would mean that it would be more expensive for us to service what debt we do have and it would add to our deficits and our debt, not decrease them," he noted.
Obama reiterated "this is real. In a government shutdown, millions of Americans face inconvenience or outright hardship and there would be a significant risk of a very deep recession at a time when we're still climbing our way out of the worst recession in our lifetimes." He pointed out to the Asia trip he cancelled this week due to the shutdown, saying "I had to miss critical meetings in Asia to promote American jobs and businesses." He said "although as long as we get this fixed that's not long-term damage, whenever we do these things, it hurts our credibility around the world. It makes it look like we don't have our act together. And that's not something we should welcome.
"The greatest nation on earth shouldn't have to get permission from a few irresponsible members of Congress every couple months just to keep our government open or to prevent an economic catastrophe," he remarked.
"let's pass a budget. Let's end this government shutdown. Let's pay our bills. Let's avert an economic shutdown," he said.
There is going to be "a cloud over US economic credibility" until this issue is resolved, said Obama