CHRISTINE LAGARDE: Well, if there was a combination of the government shutdown for a period of time and, more seriously, more damaging, if the debt ceiling was not lifted with a degree of certainty and enough time so that people could, you know, sort of have the assurance that the economy was in good standing, that would bring about so much uncertainty, so much risk of disruption, that the standing of the U.S. economy would, again, be at risk. That some of the obligations that the first economy in the world has would not be respected.
And I think, you know, there was a lot of discussion amongst the finance ministers from all over the world about the technical aspects of it. And you can argue forever as to whether the impact is going to be two and a half, 3%, 5%, how much public spending will have to be cut, how many more people will be unemployed.
But one thing for certain, around the table, it was that if there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over. And we would be at risk of tipping, yet again, into recession.
David Gregory: You know there are some figures in our government, in Congress, Senator Rand Paul, others, who say, "You know, this is overstated. The Treasury can do things that-- the concept of default is hyperbole."
CHRISTINE LAGARDE: But creative accounting is not the solution. And markets know that. The counterparts through the United States know that. And when you are the largest economy in the world, when you are the safe heaven in all circumstances, as has been the case, you can't go into that creating accounting business.
You have to honor your signature. You have to give certainty to the rest of the world. And you have to make sure that your own economy is consolidating that welcome recovery that we have seen in the last few days. Because it impacts the entire economy.