As the US debt ceiling of looms, Geithner prods Congress (AFP)

WASHINGTON (AFP) - three days before the US public debt reached its legal limit, US Treasury Secretary Timothy Geithner urged lawmakers to raise the ceiling to ensure confidence remains in the largest economy in the world.

"On Monday, May 16 - just three days of today ' hui - the United States will reach the debt limit set by Congress," Geithner said.

"I want to again encourage Congress to move as quickly as possible, so that all Americans will remain confident that the United States will meet all its obligations - not only our interest payments, but also our commitments to our elders"he says."

Republicans in Congress refused to raise the ceiling of the national debt, which today is 14,29 billion, unless they can get the White House and its democratic supporters to agree to sweeping long-term spending cuts.

The administration of President Barack Obama said they could agree to the cuts, but they also require some tax increases to increase revenues.

The limit will hit next Monday after the auction of debt for the Department of the Treasury of this week are set.

Geithner said that the failure of Congress to act in time appropriate to raise the ceiling of the debt, the Treasury Board has begun a series of extraordinary measures which will give the legislature more time to raise the ceiling and to avoid a failure of Government to its obligations.

Earlier this month, Geithner said that, because of the Government's revenues were running higher than expected, and by reducing debt problems, the Government could delay the day of judgment on August 2 before spending commitmentsincluding debt service, requires more borrowings.

We reserve Federal Ben Bernanke, Chairman warned politicians Thursday to increase the limit of debt soon or risk destabilizing the financial system.

With the Government still need to borrow to finance its huge budget deficit, Bernanke told a Senate Committee that "using the debt as a currency of Exchange limit is very risky."

Geithner warns against new recession without debt rise

WASHINGTON  - with the Government to hit its limit 14.3 billion of debt, Secretary of the Treasury Timothy Geithner has warned of "catastrophic" consequences and a new recession if Washington is not in a position to borrow more.

A divided Congress a short of time to raise the debt limit before the Monday deadline, forcing Geithner in a reallocation of funds emergency so that the Government can meet its obligations, including payments to holders of Treasury bonds.

These measures should only to give the Government until August 2, before it will start by default on payments, including those on the debt of the Treasury, an event which could trigger chaos in the financial markets.

Geithner, "a defect would be inflicting catastrophic damage, far-reaching on the economy of our country, significantly reduce the growth and the increase in unemployment," said in a letter dated Friday, to Democratic Senator Michael Bennet.

The Obama administration and legislators are fighting on ways to curb the increase in U.S. debt, with Republicans refusing to increase the limit of debt without deep reductions in spending.

In some of its more austere language to the legislators for the moment, Geithner declared a default value or missed payments would not only increase the cost of borrowing the US Government, but also for average Americans, businesses and local governments.

"An increase in the rate of the Treasury make more expensive for a family to buy a House, buy a car or send a child to College," he said. "It would make more expensive for an entrepreneur to borrow money to start a new business or invest in new products and equipment".

Largest economy in the world is recovering after the crisis financial 2007-09 but some 13.7 million Americans are work and higher gasoline and food prices threaten to slow down the recovery gradually.

If Congress does not increase the ceiling of the loan by August, Geithner is forced to choose payments than to first begin.

Missing or delaying payments on a host of obligations, including those for goods and services business and the payments of bond investors, would result in a massive and brutal reduction in spending from the Federal Government and aggregate demandthe letter warned.

"The abrupt contraction would probably be we grow in a recession," said Geithner.

U.S. Government bond market remained calm on the risk of failure for the moment. But Geithner and Federal Reserve Chairman Ben Bernanke have repeatedly asked Congress to act quickly to increase the debt limit.

The United States Government is borrowing of approximately 125 billion per month. Thursday, the country was $ 38 billion below the ceiling of the debt.

Geithner asks China to reform growth model

WASHINGTON  - Treasury Secretary Timothy Geithner told us Monday that China is making progress but needed to change its model of economic growth it has opened two days of talks between the two largest economies.

Striking a positive tone in large part at the beginning of the strategic and Economic Dialogue with United States and China, Geithner said that the reforms needed by each country "" are not in conflict and the strengths of our economies are still largely complementary. ""

"Our challenge is to strengthen the foundations for future economic growth," he said.

"In China, based on the remarkable reforms over the past 30 years, the challenge is to lay the groundwork for a new model of growth, driven by domestic demand more, with an economy based on market and a more sophisticated financial system""," he said.