Larry Summers Says It Would Be 'Catastrophic' For US To Default On Debt: 'God, I Wish We Could Move Past This'

Former Treasury Secretary Lawrence Summers reportedly said it would be "catastrophic" and "inconceivable" for the United States to default on its debt. Summers comments come in the backdrop of a looming crisis as the day on which the debt ceiling is expected to reach its statutory limit gets closer.

Last week, Treasury Secretary Janet Yellen penned a letter stating the U.S. national debt ceiling is projected to reach its statutory limit as early as Jan. 19, months ahead of economist estimates.

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“Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the [U.S.] from defaulting on its obligations,” Yellen had written in the letter.

White House Stance: The White House has asserted there will not be any negotiations over the debt ceiling. “This is an issue that is a concept — the basic — the basic duties of Congress to take care of, to handle. And so we’re going to be — continue to say that. We’re going to be very clear it should it be done without conditions,” Press Secretary Karine Jean-Pierre said in a briefing on Wednesday.

Summers further stated that if the U.S. defaults, it would be a “potential tragedy as farce.” 

“It would be catastrophic and inconceivable for the United States to default. It's not what anybody serious does. We have problems in our family or discussions about how my kids spend money. Maybe my kids will pay off Visa and maybe I will pay off Visa. But the idea that families should stiff fees because we can't agree is absurd. Similarly, the debt limit,” he told Bloomberg Television.

“I have been through a lot of these. I think at the end of the day we will meet our obligations and not cause substantial disruption. But God, I wish we could move past this. Like Senator McConnell showed real leadership in doing some time ago. Because it would be catastrophic for the United States and for our sense as a serious country if we were to actually default,” he said.

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Photo courtesy: Brookings Institution on Flickr