Barack Obama warns of possible recession ahead

Barack Obama warns of possible recession aheadPresident Barack Obama recently warned that the US risked plunging back into recession if a standoff over the US debt ceiling lingers.

This comment came in response to a statement by a top Republican that he was ready to cut a deal.

From news.yahoo.com:

“If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system,” Obama warned at a CBS town hall meeting last week that was broadcast on Sunday.

“We could have a worse recession than we already had. A worse financial crisis than we already had.”

Republican speaker John Boehner said Sunday he was ready to cut a deal over raising the US debt ceiling, but insisted the administration must move to resolve underlying problems in the US economy.

He told CBS’s “Face The Nation” program Sunday that he believed it would be necessary to raise the debt ceiling, but added it would have to be done so in a way “that addresses America’s long-term fiscal challenges.”

Economist Paul Krugman, a Nobel laureate, said, “A US Treasury bill is the gold standard of value, so much so that, during the height of the financial crisis, there were intervals where US Treasury bills had negative interest rates, because that’s what people had to hold.”

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