DTN News - U.S. NEWS: U.S. Debt Default Unimaginable, Creditors Say....NSI News Source Info # 2053(NSI News Source Info) TORONTO, Canada / SINGAPORE - June 8, 2011: Allowing a brief U.S. debt default to force government spending cuts is a "horrible idea" that could destabilize the world economy and sour already tense relations with big creditors like China, government officials and investors said on Wednesday.
A growing number of Republican lawmakers think a technical debt default might be a price worth paying if it gets the White House to accept deep spending cuts. This idea, once confined to the party's fringe, is seeping into the mainstream, Reuters reported on Tuesday.
"How can the U.S. be allowed to default?" said an official at India's central bank. "We don't think this is a possibility because this could then create huge panic globally."
Indian officials say they have little choice but to buy U.S. Treasury debt because it is still among the world's safest and most liquid investments. It held $39.8 billion in U.S. Treasuries as of March, according to U.S. data.
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