Economists are warning that Congress must allow the country to borrow more to avoid a debt default that would wreak havoc on financial markets and imperil the U.S. economy. Apparently both Democratic and Republican leaders in Congress agree that the debt limit must be increased. At last! Bipartisan agreement!
Threatening not to raise the $14.3 trillion debt ceiling -- the amount of debt the country is legally allowed to issue -- is "like playing with fire," Democratic Senator Charles Schumer said on NBC's "Meet the Press."
"If we didn't renew the debt ceiling ... We might permanently threaten confidence of the credit markets in the dollar, which could create a recession worse than the one we have now or even a depression," he said.
Republican Senator Tom Coburn also predicted a dire outcome if lawmakers were unable to reach an agreement to put the country's fiscal house in order.
"If in fact the bond vigilantes come after the government bonds in the next two to three years, we will have such bigger pain than not raising the debt ceiling," Coburn said on the same television program.
The Obama administration is under pressure to put a cap on spending to curb its $1.3 trillion budget deficit. Coburn said he thought he would vote in favor of raising the debt ceiling only if there was a specific amount of spending cuts on the table.