US debt ceiling nightmare looms
Govt will run out of cash to pay bills if Congress fails to raise ceiling by Oct 17
Three days of United States government shutdown have so far failed to faze global markets.
But investors are starting to take notice of a more crucial issue: that the US government will soon run out of money if it does not raise its debt ceiling.
Failure to do so could damage not only the United States but the rest of the global economy, International Monetary Fund chief Christine Lagarde warned yesterday (Thursday).
"It is 'mission-critical' that this be resolved as soon as possible," she said in a speech in Washington, ahead of the IMF and World Bank annual meetings next week. She said growth in the United States has already been hurt by too much fiscal consolidation, and will be below 2 per cent this year before rising by about 1 percentage point in 2014.