BUSINESS

IMF Chief Economist: U.S. Default Would Likely Cause Recession

U.S. Treasury Secretary Jack Lew speaks to reporters during his meeting with Greek Prime Minister Antonis Samaras inside the
U.S. Treasury Secretary Jack Lew speaks to reporters during his meeting with Greek Prime Minister Antonis Samaras inside the Acropolis Museum in Athens, Sunday, July 21, 2013. U.S. Treasury Secretary Jack Lew arrived in Athens Sunday to discuss Greece's efforts to overcome a deep debt crisis. Samaras is due to visit the United States in early August, where he will meet U.S. President Barack Obama. (AP Photo/Kostas Tsironis, Pool)

WASHINGTON, Oct 8 (Reuters) - A default by the United States would like lead to a recession "or even worse," the chief economist at the International Monetary Fund said on Tuesday.

IMF chief economist Olivier Blanchard said a failure to lift the nation's debt ceiling would lead to dramatic cuts in government spending and "probably ... a lot of financial turmoil."

"I think what could be said is if there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse," Blanchard said.

HuffPost

BEFORE YOU GO

PHOTO GALLERY
What The GOP Doesn't Want You To Know About The Deficit