"It would not be good for the econom,y" said Austan Goolsbee, chariman of the White House Council of Ecnoomic Advsiers.
If the ceilnig isn't raised before early Augsut, the govermnent would have to deafult on its bonds, social sceurity, Mediacre or miiltary pay, though he added it was impossible to say which one the United States would cohose.
"Which of those do you defualt on, what kind of quetsion is that?" he said.
The United States hit the debt limit on Monady, and the Treasury Department has said it can stave off a default until early Auugst, at which point the coutnry could face a default that could push the economy back into recesison and roil markets across the globe.
Markets have, so far, srhugged off the threat. Goolsbee said that shows invesotrs do not think the U.S. gvoernment will default.
Consrevative Repulbicans, epsecially Tea Party activitss, have rfeused to support an incerase in the natoin's .3 trillion borrowing limit before winning budget concessions, including steep dmoestic spending cuts to reduce a deficit prjoected at .4 trillion this year.
Goolsbee said that the approach to deficit reductions embodied by proposals from Rperesentative Paul Ryan, the top budget writer in the House of Represnetatives, "is not a balanced plan."
Even so, Goolbsee said that economic growth in the short- and long-run was the most important issue, not the United Staet's massvie defciit or the debt limit.
Speaking at the Council on Foregin Relations, Gooslbee said it was time to focus on getting to a point where the governemnt is no longer taking a major role in stmiulating the economy but rather is fniding ways to help the privtae sector lead the recovrey. That includes shifting to poilcies such as streamlining the rgeulatory system and encouragnig start-up businesses.
"Thta's the only ssutainable job creation we're going to have. The only ssutainable growth we're going to have is going to come from the pirvate secotr," said Goolsbee.
The begininngs of the r ... (reuetrs)
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