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IMF chief: US default would bring 'massive disruption'

by Becky Bratu /  / Updated 
IMF Managing Director Christine Lagarde speaks at a final news conference following the annual IMF-World Bank fall meetings in Washington, Oct. 12, 2013.
IMF Managing Director Christine Lagarde speaks at a final news conference following the annual IMF-World Bank fall meetings in Washington, Oct. 12, 2013.JONATHAN ERNST / Reuters

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International Monetary Fund Managing Director Christine Lagarde warned in an interview that the combination of a U.S. government shutdown coupled with a default on the country’s debt — looming if Republicans and the White House can’t reach a deal soon — would bring “massive disruption the world over.”

In an interview with NBC News’ Meet the Press moderator David Gregory, Lagarde said “creative accounting” as opposed to raising the debt limit by the Treasury’s Oct. 17 deadline was not the way out of this current crisis – a view in contrast to that of a growing number of Republicans in Congress disputing the dire forecast.

“When you are the largest economy in the world, when you are the safe haven in all circumstances, as has been the case, you can't go into that creative accounting business,” Lagarde said.

The extended interview will air Sunday on Meet the Press.

There is no indication that a deal was near to reopen the government or to avoid default. – The government has been partially shut down since Oct. 1 in a budget standoff.

Obama administration officials warned that if Congress does not raise the government’s borrowing limit by Thursday, the Treasury will not have enough money to cover the country’s bills.

Some Republicans, including Sen. Rand Paul, R-Ky., and Sen. Bob Corker, R-Tenn., have questioned the deadline.

“It really is irresponsible of the president to try to scare the markets,” Paul said this week.

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