5 CEOs Who Don't Want to Gamble With the Debt Ceiling

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We're now roughly 48 hours from the Treasury's Oct. 17 deadline to raise the debt ceiling, and the standoff in Washington remains unresolved. And while this sorry state of affairs may be the product of Washington insider games, a default would have a considerable impact on businesses and individuals well beyond the Beltway. In the following quotes, the CEOs of five major corporations lay out the stakes of lawmakers' game of chicken with the debt ceiling:

Klaus Kleinfeld, chairman and CEO, Alcoa (NYSE: AA  )
"We've seen what [lawmakers] are capable of doing at a time when the economy is just in the course of recovering, here in the U.S. The last thing we need is those type of disruptions. What I think we should do is raise on a short-term the debt ceiling and start a very serious discussion on fiscal reform -- and that should happen, and I think with grown-ups that typically happens." (Oct. 2)

"The longer [the threat of default] goes on, the more impact it will have. Congress and the U.S. administration need to find a solution ... to play with this giant Taser is irresponsible." (Oct. 8)

Lloyd Blankfein, chairman and CEO, Goldman Sachs (NYSE: GS  )
"There's precedent for a government shutdown; there's no precedent for default. We really haven't seen this before, and I'm not anxious to be part of the process to witness this." (Oct. 2)

Jamie Dimon, chairman and CEO, JPMorgan Chase (NYSE: JPM  )
"We just want solutions. If people do the right things, America can grow aggressively and grow rapidly. That's what we should be looking for." (Oct. 2)

"The United States cannot default, and, in my opinion, will not default. It would ripple through the global economy in a way you couldn't possibly understand. ... Please, let's not shoot ourselves in the foot." (Oct. 12)

Anshu Jain, co-CEO, Deutsche Bank
"There isn't life beyond default. This would be a very rapidly spreading, fatal disease. ... Europe was paralyzed at the possibility of an Italian default, which was a 2 trillion euro economy. ... You're now talking about the underpinnings of finance." (Oct. 12)

Ken Chenault, chairman and CEO, American Express (NYSE: AXP  )
"If the United States hits the debt ceiling and is unable to pay its debts, the consequences will be immediate and dramatic. The reality is that U.S. Treasury debt is viewed as a risk-free asset, because the United States has been the wealthiest nation on the planet for the last 100 years, and no one ever believed that the United States would not pay its debts. As a result, the world financing infrastructure is built on U.S. Treasury debt; if the U.S. defaults, the system literally unwinds.

"What we're talking about is a default; it's the first time in 237 years, the history of this country, that the United States would not pay its bills. What that means is the government does not stand behind its word; the confidence in our financial system would be severely eroded. This would be catastrophic.

My message to Washington is: The United States has gone through incredible crises and our leaders have been able to find common ground, and that's what our leaders have to do. Failure is not an option, because what our government should be focused on is doing what's right for our people, doing what's right for the economy, and, in fact, ensuring that the promise of this great country can be realized." (Oct. 9)

Here's what every investor needs to know about the national debt
Lawmakers will almost certainly reach an agreement to extend the debt ceiling, averting a catastrophe in the short term. However, the U.S. debt remains a long-term problem. The government has piled on more than $10 trillion of new debt since 2000, with annual deficits topped $1 trillion after the financial crisis.

The Motley Fool's new free report, "Everything You Need to Know About the National Debt," walks you through with step-by-step explanations about how the government spends your money, where it gets tax revenue from, the future of spending, and what a $16 trillion debt means for our future. Click here to read the full report!

Read/Post Comments (6) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 15, 2013, at 11:41 AM, CluckChicken wrote:

    Klaus Kleinfeld - "...and that should happen, and I think with grown-ups that typically happens."

    Pretty sure Klaus's definition, as well as mine, is very different then what one would use to define the members of Congress.

  • Report this Comment On October 15, 2013, at 1:35 PM, Mathman6577 wrote:

    There no chance of a default on the debt -- the government takes in plenty of money to pay existing debt. The problem is that most pol's want to spend even more taxpayer money to drive future debt even higher. There is a lot of lying going on.

  • Report this Comment On October 15, 2013, at 4:26 PM, TMFAleph1 wrote:


    Thanks for your comment. You wrote:

    "There no chance of a default on the debt -- the government takes in plenty of money to pay existing debt."

    Do you have any sources to support that statement?

  • Report this Comment On October 16, 2013, at 3:24 AM, anuvaka wrote:

    I wonder what source is behind the effort to have the US default.

    Is reversing Obamacare worth collapsing the entire Country?

    Some other Force is behind this. I hope it becomes obvious.

  • Report this Comment On October 16, 2013, at 3:27 AM, LPStocks9086 wrote:

    "the government takes in plenty of money to pay existing debt. "

    Yea, it would be nice if the government was able to take in enough money to pay off 17 trillion in a reasonable amount of time....but, that's just not the case. We're in a bigger fiscal hole then most want to believe...even myself...

  • Report this Comment On October 16, 2013, at 3:40 AM, LPStocks9086 wrote:

    "Is reversing Obamacare worth collapsing the entire Country?"

    Is PASSING Obama care worth it? Forces are behind it on both sides.... Are you a business owner with many employees? If you were, you might think differently about Obamacare.

    The fact remains. These branches of government are supposed to work separately and the president is supposted to make the best decision for the good of the country when a bill gets to his desk. Obama threw it back at them and said "do it my way or we shut down". He the one who made the initial decision that got us to where we are now. All for a bill/plan that the American Public doesn't want (and that congress already stated they don't want the taxpayers to pay for).

    Congress made the decision to turn it back on (the way he wants) congress has the very right not to provide public money for something they don't agree with. He's the one who made the decision that got us to this point.

    When the lights are about to go out, you pay the bill to keep them on....Obama: I don't like this one...give me another the way I want it...

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