By- Correspondent | Date- July 07, 2011
United States President Barack Obama has warned yesterday that US is under risk a new recession. According to him, the recession is inevitable if the US Congress fails to raise the US debt ceiling. Answering a question during a Twitter Town Hall being streamed live from the White House, the US president stated that if the nation fails to raise the $14.29 trillion debt, it would lead to a second recession or worse. Earlier Obama’s Republican rivals had criticized his handling of Washington’s debt woes. This was on the eve of White House talks where the president had called with congressional leaders seeking a deal to prevent an early August non-payment.
Republican Senate Minority Leader Mitch McConnell said the negotiations on a package deal to cut the deficit and raise the US debt limit would test Obama’s willingness to get the country’s fiscal house in order.
The US ran into its $14.29 trillion debt ceiling on May 16. Since then US has used spending and accounting adjustments, as well as higher tax receipts to continue operating without impact on government obligations.
Mentionable that if the US fails to clear off the debts and another recession start off, the Indian IT and ITES industry would be taking a big blow. With the dollar value depreciating already and companies still in the process of making revivals post the last recession, newer measures of cost cutting initiatives are expected in the Indian corporate sector. However for the IT companies who have shifted their focus to Europe post the last recession may not worry right away.