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World Economists Raise Alarm on U.S. Debt Ceiling

WASHINGTON, DC -- Forget the shutdown, a bigger problem is coming-- the debt ceiling debate.
Think the shutdown is bad?  Economists are saying: We ain't seen nothing yet.

Today-- a dire warning from the U.S Treasury Department:  "There might be a financial crisis and recession that could echo the events of 2008... or worse."
This is all because of the debt ceiling.

The U.S. government hit its legal borrowing limit of $16.69 trillion dollars back in May. Since then, it's been using special accounting maneuvers to stay below that limit.

But Treasury Secretary Jack Lew says it won't be able to do that anymore, as of October 17 or earlier.

So Congress has to raise that debt ceiling, or the government will default, meaning it won't be able to pay its bills.
In our more than 200-year history, that's never happened.

Treasury says it could be "catastrophic.'
Think frozen credit markets, higher unemployment, higher interest rates, sharp declines in household wealth, plunging consumer and business confidence.

And the Treasury isn't the only one sounding a warning bell.
LMF chief Christine Lagarde says defaulting "could very seriously damage the entire global economy."

Economist Mark Zandi warns it will push us "back into recession."
Bank of America warns of another credit rating downgrade.
Stocks have been falling for over a week.

Wall Street hears the warnings - does Washington?

(Alison Kosik, CNN)

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