[tutkarussia]

Reuters: http://www.reuters.com/article/2011/...7497G620110510

A majority of top Wall Street bond dealers and money managers say spending cuts alone cannot solve the U.S. budget problems and tax increases must be part of the mix.

In a Reuters survey conducted on Tuesday, 17 out of 29 fund managers and economists representing major Wall Street bond dealing firms said the Republicans' favored option of spending cuts alone would not work.

...

"I would ask Republicans to come up with new revenues that don't undermine incentives to work and invest. And I would ask Democrats to recast entitlements in a way that doesn't compromise the social safety net," said Bob DiClemente, head of U.S. economic and market analysis at Citigroup in New York.

...

The United States is expected to hit its $14.3 trillion legal limit on how much it can borrow on May 16. Republicans have tried to link any rise in the debt ceiling with a deal to narrow the budget deficit, which they worry is approaching unsustainable levels.

To avoid a showdown, the U.S. Treasury says it can hold off until August 2 before defaulting on the nation's debt.

A default would be a cataclysmic event for the U.S. economy, its financial markets and, probably, for the rest of the world.