Oct. 6 - U.S. Treasury Secretary Jacob Lew quotes from President Ronald Reagan to caution against allowing the country to go into a debt default. Mana Rabiee reports.
The markets are wary over a U.S. government shutdown, fearing it could trim economic growth. Adding fuel to the fire, the October 17th deadline to raise the U.S. debt ceiling is looming. Failure to meet the deadline means the unprecedented risk of debt default - putting the U.S. in the company of countries like Angola and Greece. U.S. Treasury Secretary Jacob Lew, speaking Sunday on the CBS news program Face the Nation: SOUNDBITE: U.S. TREASURY SECRETARY JACOB LEW SAYING: "It's a whole different order of magnitude if we default for the first time since 1789. We've never done it. But if I could just read to you what President Reagan said about it. I think it really captures very much what I think the risk is. And I quote, "the full consequences of a default or even the serious prospect of default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets." Default would be nothing short of catastrophic, the Treasury says. The U.S. is the issuer of the world's reserve currency. Its interest rates form the global benchmark. So while investors have been selling stocks as a precaution, many are hopeful a deal will be struck.