World Bank Chief: U.S. 'Playing With Fire' In Debt Ceiling Debate

WASHINGTON (Lesley Wroughton) - The United States is courting calamity with the continuing stalemate in Congress over raising the country's debt limit, the World Bank's chief said on Friday.

"Whatever the logic about the tactics, it's a very dangerous environment," Robert Zoellick told a meeting of the Society for International Development, adding that people were "playing with fire."

"To be blunt, to have a debt default in the United States would not only be a financial calamity but should be an embarrassment for every American" he said.

Unless the $14.3 trillion debt ceiling is raised by Tuesday, the United States will lose its ability to borrow and start to run out of cash to pay its bills.

Efforts to avoid an unprecedented debt default suffered a new blow on Thursday when some fiscally hardline Republicans blocked a budget deficit plan proposed by their own congressional leaders.

On Friday, President Barack Obama said he was ready to work with top Democrats and Republicans through the weekend to get a debt ceiling accord.

Zoellick said the political standoff in Washington was coming at a time when Europe faced fiscal difficulties and Japan was struggling with low growth and is trying to recover from an earthquake.

"So you have an environment that's already fragile and uncertain," he said.

(Editing by Leslie Adler)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[srooge]

10:11 PM on 07/31/2011

This is a perfect time for the rest of the world to come to are aid. Maybe, Bono can organize a charity music concert. America Aid.

[dadw5boys]

07:42 PM on 07/31/2011

Cash out of the World Bank and pay off our debts !!!!!!

How much is invested in the World Bank by the USA ? Trillions ?

[El Chingaso]

02:11 PM on 07/30/2011

He ought to write jokes for late night talk shows. I can't quit laughing at this one...

[JoeDoorman]

12:41 PM on 07/30/2011

Everybody sing...

Party of No... Stop cryin' my Boehn--er…
Party of No... You screamed. "U li--e"
Party of No... We'll bring down that Bro-ther…
Party of No... He’ll have nothin’ to show.

Party of No... We’ve got to get small-er…
Party of No... We’ve got to be fr-ee…
Party of No... You won’t tax my brot-her…
Party of No... Just tax pover-ty…

Party of No... You’re ruled by Tea Bag--gers.
Party of No... You’d make Lincoln cr--y"
Party of No... Can’t bring us toget--her…
Party of No... By just say’in No.

[ritamary]

12:27 PM on 07/30/2011

Robert Zoellick, please contact the Tea Partyers in the House with your common sense message. They continue to insist that everything will turn out just fine if the United States defaults. Then again, if they don't listen to their own Speaker Boehner, they probably won't listen to you either.

[Michael Ruiz]

12:59 AM on 07/31/2011

The US has defaulted many times before...and we actually are doing it currently on a daily basis. The world Bank is one of the most corrupt organizations and your forming your opinion
from them?

[Jefferson Vickers]

10:50 AM on 07/30/2011

And it is an embarasment as well as the baggers clogging the toliet in the House

[Grace Note]

10:45 AM on 07/30/2011

“The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

[El Chingaso]

08:42 AM on 07/30/2011

"To be blunt, to have a debt default in the United States would not only be a financial calamity but should be an embarrassment for every American" he said. Oh, s-u-r-e. That's so laughable. Ha-ha-ha...

[Sleepers Awake]

08:13 AM on 07/30/2011

Part ONE of TWO:

Perhaps what World Bank chief, Robert Zoellick, says is true: "To be blunt, to have a debt default in the United States ... should be an embarrassment for every American."

It should be an embarrassment for every American at least to the extent we have allowed our DC "Representatives" to abandon their responsibilities to their constituents. Instead, our "Representatives have become mere handmaidens...

Handmaidens to (1) the multimillion dollar a year CEOs of "too big to fail" (TBTF) banks allowing them to create sub-sub prime investment packages and derivatives to be sold as something of value (derivatives, which at this time amount to more than the value of all the real estate in the world),

Handmaidens to (2) the CEOs of multinational corporations whose multimillion dollar a year salaries come from breaking up companies to export jobs and profits overseas to avoid taxation,

Handmaidens to (3) the filthy rich investors and Wall Street traders whose computerized micro-second trading decisions are made not for the purpose of a real long term investment in a worthy industry but to turn an instant profit on microsecond changes in currency values detected by a computerized trading program.

[Sleepers Awake]

08:13 AM on 07/30/2011

PART TWO OF TWO:

We have allowed our "Representatives" to sell their souls to their benefactors, ALWAYS at the expense of representing their constituencies, ALWAYS at the expense of labor, which has been under assault at least since the beginning of deregulation during the Ronald Reagan Presidency.

Look at the growth of the middle class beginning in 1945 after World War II and up to the Ronald Reagan Presidency. For a time the US produced its own cars, refrigerators, washers, dryers, toasters, and television sets.

Yes, perhaps Americans should be embarrassed, embarrassed that we have allowed our "Representatives" free reign to sell their souls to their benefactors.

Who profits when Chevrolet opens a manufacturing plant in Korea, or Ford in Brazil, for example? The US industry and investor groups make huge profits which are required to succeed, but US labor loses to the point we are witnessing now---US labor (over 20% real unemployment rate) cannot buy the cars US manufacturers produce.

As long as politicians align themselves with their contributors at the expense of their constituents, and fail to regulate the flow of capital or tax the industry and investor classes, the economic calamity facing the US will only get worse, and yes, for allowing our DC politicians to do this to us, we should probably be embarrassed.

[jenyouwino]

10:32 PM on 07/31/2011

You mean we gave billions to bail out GM, and the jobs went to Korea? Well, yeah. The Cruze could pass for a Hyundai or a Suzuki. Amazing how GM went from the brink to earning a billion in a couple of quarters now isn't it? This is hoodoo voodoo accounting at it's best. The goal is pretty obvious. Roughly 30,000 jobs have vanished from the gulf and we've just funded deep well development off the coast of Brazil. Would that I saw that one coming, but one person in particular certainly did. Job creation is Obama's JOB #1? BS! He wants dependency, and if he can't tax us to submission, he'll just move our jobs elsewhere. It's hard to be independent when you're unemployed. I realize this has been going on for decades, but we haven't had a crisis like this to exploit since the great depression. So much could have been done to reverse the damage, but that wasn't, and still isn't the agenda. I hope as a country we keep on fighting DC. I like using 2,4-d on my broad leaf weeds. In some countries, (not far from here) you have to try vinegar or some other "green" household chemical instead. Not a joke by the way.

[Sleepers Awake]

12:03 AM on 08/01/2011

Yes, it's the CEOs and shareholders who are doing fine with GMs practices.

Note, too, that these are the people who are yelling the loudest for stability.

Thanks.

[David Batten]

08:09 AM on 07/30/2011

Central Banking is one of the central pillars of communism. The World Bank and IMF exist for the sole purpose of enslaving nations through usury, thereby paving the way for WORLD government. If you doubt this, look up the IMF's April 13th, 2010 paper titled: Reserve Accumulation and International Monetary Stability. In it, you will see sections on transitioning from national currencies, to a basket of international currencies, and finally into a global currency (possibly named the Bancor, in honor of John Maynard Keynes who had this vision in the 1940's. In 1913, the passing of the Federal Reserve act was the beginning of the end for the US, and there's no way back now.

[maigoro]

05:02 AM on 07/30/2011

who the heck cares if it is an embarrassment?

[offmyrocker]

12:19 AM on 07/30/2011

one more nobody....and we care what you say because....you want more of our money....later dude....ask Africa for more cash

[MTLAUREL]

09:58 PM on 07/29/2011

embarrassed? are you serious? sane people are in shock and grief...the idiot teapartiers, although a mere few, are pumped with adrenaline. Things will have to get worse...hey, there's a new movement...Americanselect---an internet based electoral candidate selecting and nominating venue. something to focus on instead of the nausea about all these events.

[offmyrocker]

12:21 AM on 07/30/2011

yea god forbid we pay our bills...nah lets get some more credit cards and pump that debt right up there. Heck...we ain't gona pay it back anyway...just foreclose on the white house...who cares...print more money...so what about inflation thats coming and OH boy its coming..you better be ready cause that's gona take the milk away from some babies

[terramartom]

09:09 PM on 07/29/2011

If you could only make the republican party just "vanish" Americans would be all for it!

[offmyrocker]

12:21 AM on 07/30/2011

heck yea no one to tell you , you spend too much

[K August]

12:36 AM on 07/30/2011

The National Debt was only about SIX Trillion before Bush took office. He spent the surplus he inherited, turned his back on 'pay as you go', raided the 2.6 Trillion social security trust fund and then spent so much more that he had to raised the ceiling SEVEN times.......

We KNOW who got us into this mess.

[jenyouwino]

10:36 PM on 07/31/2011

POOF! We're socialist. Now let's see what we can learn from Greece.