The Next Debt Crisis Could Be Much Worse than in 2013, GAO Warns

Saturday, July 18, 2015
By Paul Martin

Eric Pianin
CNBC.com
Friday, 17 Jul 2015

Back in 2013, Susan Irving, a senior official at the Government Accountability Office, began meeting with executives of prominent New York and Boston investment houses and securities experts to get their take on another festering dispute in Washington over raising the debt ceiling. (Tweet This)

With some Republicans once again threatening to block an increase in the government’s borrowing authority unless President Obama agreed to important spending concessions, the Treasury was forced to begin taking “extraordinary measures” or bookkeeping maneuvers to keep from bumping up against its legal borrowing limit. It was a repeat of a 2011 political drama in which the government came within hours of defaulting on its debt for the first time in history and hurt its credit rating.

The so called “X-Hour” surprised Irving by how many investors were extremely nervous and had begun shunning Treasury notes for fear of getting stuck with losses or delayed repayment.

The Rest…HERE

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