OECD: Not raising the debt limit would cause wide recession

Gurria also noted that, even if the debt limit will in all likelihood be raised, “just the uncertainty about the government’s ability to avoid a default on part of its debt would result in disruptions in financial markets that would deepen the economic downturn, lowering tax revenues and forcing more cuts in public spending.”

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The Treasury Department says that the $16.7 trillion debt limit should be raised by Oct. 17.

Some estimates have said that the U.S. could potentially avoid default until the beginning of November, and some Republicans have said the U.S. could prioritize payments to limit the consequences of default. Those Republicans have also accused the administration of unnecessarily ratcheting up fear about the debt ceiling.

But Treasury Secretary Jack Lew said Thursday that GOP debt-limit deniers were being “irresponsible and reckless.”