Meet the Press | October 13, 2013
>>> there is no deal. the american government is barelying toward inin inin inin ining -- barrelling toward default. how concerning is this to you?
>> it's very concerning. i spent the last three days with 300 finance ministers and banks from across the world, and the world was doing better. there was recovery in the u.s. in europe at last. japan was turning the corner. the emerging markets were still growing fast and low-income countries were really showing strong growth. they all came together to talk about the u.s. monetary policy and its impact on emerging market economies and how they should well prepare for that. and then they found out the debt ceiling was the issue. they found out that the government had shut down and that there was no remedy in sight. so it really completely transformed the meeting in the last few days.
>> help me understand from your point of view, managing director of the imf, international monetary fund , where you're providing aid to countries at risk around the globe, but you're also keeping an eye on the u.s. economy , the global economy . obviously there is a credibility issue for the united states here, but help me understand the actual economic shock that would result from us not raising this debt ceiling and being in a position where america can't pay all its bills on time?
>> do you remember 2008 , the beginning of the great recession?
>> well, if there was a combination of the government shutdown for a period of time and, more seriously, more damaging if the debt ceiling was not lifted with a degree of certainty and enough time so that people could sort of have the assurance that the economy was in good standing, that would bring about so much uncertainty, so much risk of disruption that the standing of the u.s. economy would, again, be at risk. that some of the obligations that the first economy in the world has would not be respected. and i think, you know, there was a lot of discussion amongst the finance ministers from all over the world about the technical aspects of it. and you can argue forever as to whether the impact is going to be 2.5, 3%, 5%, how much public spending will have to be cut, how many more people will have to be unemployed. but one thing is certain around the table, it was that if there is that degree of disruption, that lack of certainty, that lack of trust in the u.s. sitti signature, it would mean massive disruption the world over and we would be tipped again into massive rupture. that was that tip at the big table.
>> in 2008 , the great recession, as it's called, this would mean another recession from your point of view?
>> if it wasn't resolved, yes, that's what the risk is.