Washington: US President Barack Obama on Monday warned the Congress, in particular leaders of the Republican-controlled House of Representatives, to increase the debt limit, as failing to do so would plunge the country and the world in an economic crisis.
"Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money.... It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession," Obama told reporters at a White House news conference.
"And ironically it would probably increase our deficit. So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It's absurd. As the speaker said two years ago, it would be, and I'm quoting Speaker Boehner now, 'a financial disaster, not only for us, but for the worldwide economy'," Obama said at the news conference, the last of his first term.
Obama took oath of office for his second term on Sunday at a private ceremony and on Monday would be held the ceremonial oath taking ceremony at the Capitol Hill.
"Let's finish this debate. Let's give our businesses and the world the certainty that our economy and our reputation are still second to none. We pay our bills, we handle our business, and then we can move on because America has a lot to do," he said.
Taking head-on the Republican leaders of the Congress who are not letting any increase in the debt ceiling, Obama said that the Congress needs to do it.
"The issue here is whether or not America pays its bills. We are not a deadbeat nation. And so there's a very simple solution to this: Congress authorises us to pay our bills," he said in response to a question.
"Raising the debt ceiling does not authorize us to spend more. All it does is say, that America will pay its bills. And we are not a deadbeat nation. And the consequences of us not paying our bills, as I outlined in my opening statement, would be disastrous," he said.
"So, I understand the impulse to try to get around this in a simple way. But there's one way to get around this. There's one way to deal with it, and that is for Congress to authorize me to pay for those items of spending that they have already authorised.
"The notion that Republicans in the House, or maybe some Republicans in the Senate would suggest that in order for us to get our way on our spending priorities, that we would risk the full faith and credit of the United States, that I think is not what the founders intended," he argued.
First Published: Tuesday, January 15, 2013, 08:49