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 (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 (GS 0.53%)
"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 (JPM -0.48%)
"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 (AXP 1.94%)
"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)
