U.S. Debt Ceiling Battle Threatens World Economy
The International Monetary Fund is warning that if the United States fails to raise its debt limit, it will harm the world economy.
That may be an understatement.
The IMF forecast assumes that the U.S. government shutdown will last only a brief period. However, it warned that failing to raise the debt limit later this month could lead to a default on U.S. debt. This could cause interest rates to spike, stock and bond markets to crater, and possibly push the U.S. economy further into recession.
SOUNDBITE: IMF Chief Economist Olivier Blanchard:
“Now the shutdown is yet another bad outcome, although one which, if it doesn’t last too long, will have limited macro [-economic] implications. Failure to lift the debt ceiling would, however, be a major event. Prolonged failure would lead to an extreme fiscal consolidation and almost surely derail the U.S. recovery. But the effects of any failure to repay the debt would be felt right away, leading to potentially major disruptions in financial markets, both in the United States and abroad.”
China also gave America a warning on October 7. China’s vice foreign minister told reporters that the U.S. must work earnestly to resolve its political issues to prevent a default. He said it is America’s responsibility “to ensure the safety of Chinese investments in the United States.”
Leviticus 26 details the curses God will bring upon the modern nations of Israel because of disobedience to His laws. Notice the financial curse prophesied in verse 16: “Ye shall sow your seed in vain, for your enemies shall eat it.”
America’s debt and deficit are the biggest threats to America’s economy. It has few choices left. The U.S. can try to push back the day of reckoning by borrowing and printing more money. Or it can cut spending and raise taxes to pay the bills. The only other alternative is default. None of these options are painless—and all come with serious consequences for our debt-addicted economy.
Read The United States and Britain in Prophecy to see where this is heading.
