With time quickly running out to raise the U.S. debt ceiling, the Obama administration is turning to biblical rhetoric to underscore the disastrous consequences if the United States defaults. For weeks Treasury Secretary Timothy Geithner and other administration officials have been warning of an economic "catastrophe" if the $14.3 trillion debt ceiling, which caps the amount Washington can borrow, is not raised by August 2. Merriam-Webster dictionary defines catastrophe as "a momentous tragic event ranging from extreme misfortune to utter overthrow or ruin." That definition appears to chime with the view of most economists, who agree that a U.S. default on its obligations would plunge the United States into a new recession and send shockwaves through international financial markets. In interviews, speeches and news conferences, administration officials have used the word again and again. But instead of scaring Republicans into action and breaking deadlocked debt talks it has had the opposite effect. Republican lawmakers accuse the Obama administration of scaremongering and many refuse to budge from their firm belief that a default will not happen, that the United States can keep paying its creditors simply by cutting back on spending. Americans also do not appear to share the Obama administration's sense of doom. Polls show a majority of Americans are happy for the debt ceiling not to be raised, although its not clear that those being surveyed are fully aware of the consequences of such a step. WHEN CATASTROPHE IS NOT ENOUGH So, the White House has upped the ante, eschewing catastrophe for a word more reminiscent of the "Cold War" stand-off between a nuclear-armed Soviet Union and United States -- Armageddon.

 

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WASHINGTON (Reuters) - President Barack Obama threatened to fight Wall Street banks on Thursday with new proposals to limit financial risk taking, sending stocks and the dollar tumbling.

Obama, a Democrat who is struggling to advance his agenda after a key election loss this week, laid out rules to restrict some banks' most lucrative operations, which he blamed for helping to cause the financial crisis.

"If these folks want a fight, it's a fight I'm ready to have," Obama told reporters at the White House, flanked by his top economic advisers and lawmakers.

"We should no longer allow banks to stray too far from their central mission of serving their customers," he said.

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