Congressman Jim Himes has recently warned about the consequences of the US failing to resolve the upcoming debt ceiling crisis. He stated that the US has never been close to defaulting its debt before and the results of a possible defaulting would be catastrophic. The US dollar's position as the world's reserve currency could be put into jeopardy and people may refer to alternative investments such as the UK or EU instead. Treasury Secretary Janet Yellen has also declared that an economic calamity will follow if the US fails to raise its debt ceiling while Hillary Clinton has concurred that a financial meltdown could occur.

These stark words coming from Himes, Yellen and Clinton should serve as a wake-up call. It's time for US legislators to find an agreement and prevent a calamitous default. The potential disruption of the US's financial obligations can only result in a decrease of investor beliefs which will cause a ripple effect into other markets as well as the US dollar's site as the world's reserve currency. A complete overhaul of the US's fiscal policies and strict enforcement on spending are required in order to address the US's economic dilemma which, if not managed properly, could lead to further defaults in the near future. A solution must be found before it is too late as the consequences of a US debt default are too great.



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