(Image Source: KYTX)


BY: ALLIE SPILLYARDS

Debt negotiations continue -- and keep continuing. With just days left until the Treasury’s August 2nd deadline -- still no compromise.
Skeptics wonder if an agreement will ever be reached. And Americans aren’t the only ones who’ve lost hope.

“The rest of the world has always looked at the United States as a very stable place. Certainly our currency has been the world’s currency. I think people now are going to question our ability to order our own affairs. This is harmful to us. It will be much more harmful if we don’t have an agreement by August 2nd." 

Markets have been unstable for weeks as the United States edged closer to the brink of possible financial disaster. According to The Atlantic -- the time for talk is over.

“Washington can't calm markets with talk anymore. It can only stop volatility, panic, sell-offs, higher interest rates and other market-distorting consequences by legislating. Legislating with each other. Not against each other." 

NBC’s David Gregory points to a New York Times editorial highlighting the opinion of Moody’s Analytics’ chief economist.

“You keep putting one piece of sand on the pile, nothing happens, and then all of a sudden it just caves. Several traders and bankers, including Mr. Zandi, said the imminence of a possible default was already damaging the United States’ standing as the most credit worthy country in the world. The tarnished reputation may linger, even if the government reaches a deal, and especially if the country’s financial books remain unbalanced. Our aura is diminished. You know people really view the U.S. as the AAA, the gold standard, and I think we’re tarnishing that.'" 

And some in the media say -- the President and Congress should look to the past. CNN remembers the words of former President Ronald Reagan.

RONALD REAGAN: “The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well earned reputation for reliability and credibility -- two things that set us apart from much of the world." 

So what if Congress misses the deadline? Politico contributor Joe Scarborough paints a picture of August 3rd -- the day after the U.S. is set to default on its debt.

“European markets reacted with understandable alarm while shock waves raced across Asia despite the early morning hour. China remained still, issuing little more than bland assurances, while its leaders quietly relished the fact that the United States of America had undermined its economic standing in a way that the Middle Kingdom could never have done on its own." 

But according to Reuters, the U.S. is bound to recover -- even if Congress doesn’t reach the August 2nd deadline. America should be able to quickly draw money in once again thanks to its strong financial past.