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A crisis worse than 2008? Treasury warns on debt limit

The U.S. Treasury has stepped into the debt limit fray, warning Thursday morning that if the United States were forced to default on its obligations, the consequences could be "catastrophic."

In a report on the debt-ceiling, Treasury leadership offered its most stark assessment yet. From MarketWatch:

"There might be a financial crisis and recession that could echo the events of 2008 or worse," Treasury said in a report on the debt ceiling brinkmanship. There may be some tentative signs that the current debate is affecting financial markets, the report said.

The Washington Post posted a copy of the full report online, with some additional color from Treasury Secretary Jack Lew:

“As we saw two years ago, prolonged uncertainty over whether our nation will pay its bills in full and on time hurts our economy,” Treasury Secretary Jack Lew said. “Postponing a debt-ceiling increase to the very last minute is exactly what our economy does not need — a self-inflicted wound harming families and businesses. Our nation has worked hard to recover from the 2008 financial crisis, and Congress must act now to lift the debt ceiling before that recovery is put in jeopardy.”

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