'You don't reduce your debt by not paying the bills'

You've heard the Republicans say that Obamacare will hurt the economy, but the economy has been growing and creating jobs. The single-greatest threat to our economy and to our businesses like this one is not the Affordable Care Act, it's the unwillingness of the Republicans in the Congress to stop refighting a settled election, or making the demands that have nothing to do with the Budget. They need to move on to the actual business of governing. That's what will help the economy. That's what will grow the economy. That's what will put people back to work (applause).

And more than that, House Republicans need to stop careening from one crisis to another in everything they do. Have you noticed that? Since they've taken over the House of Representatives, we have one of these crises every three months. Have you noticed? And you keep on thinking, all right, well, this is going to be the last one; they're not going to do this again. And then they do it again.

I know you're tired of it. I'm tired of it. It doesn't mean that they're wrong on every single issue. I've said I'm happy to negotiate with you on anything. I don't think any one party has a monopoly on wisdom. But you don't negotiate by putting a gun to the other person's head - or, worse yet, by putting a gun to the American people's head by threatening a shutdown.

And, by the way, even after Congress reopens your government, it's going to have to turn around very quickly and do something else - and that's pay America's bills. I want to spend a little time on this. It's something called raising the debt ceiling. And it's got a lousy name, so, a lot of people end up thinking, I don't know, I don't think we should raise our debt ceiling, because it sounds like we're raising our debt. But that's not what this is about.

It doesn't cost taxpayers a single dime. It doesn't grow our deficits by a single dime. It doesn't allow anybody to spend any new money whatsoever. So, it's not something that raises our debt. What it does is allow the US Treasury, the US government to pay the bills that the Congress has already racked up. I want you to think about this.

If you go to a restaurant, you order a meal, you eat it. Maybe you have some wine. Maybe you have two glasses of wine - great meal. And then you look at the tab - it's pretty expensive - and you decide I'm not going to pay the bill. But you're not saving money. You're not being frugal. You're just a deadbeat, right? (laughter). If you buy a house and you decide, this month I'd rather go on vacation somewhere, so, I'm not going to pay my mortgage, you didn't just save yourself some money. You're just going to get foreclosed on.

So, you don't save money by not paying your bills. You don't reduce your debt by not paying your bills. All you're doing is making yourself unreliable and hurting your credit rating. And you'll start getting those phone calls and those notices in the mail. And the next time you try to borrow, somebody is going to say, uh-uh, because you don't pay your bills, you're a deadbeat. Well, the same is true for countries.

The only thing that the debt ceiling does is to let the US Treasury pay for what the Congress has already bought. That's why it's something that has been routine. Traditionally, it's not a big deal. The Congress has raised it 45 times since Ronald Reagan took office. This is just kind of a routine part of keeping the government running. The last time the House Republicans flirted with not raising the debt ceiling, back in 2011 - some of you remember this - our economy took a bad hit. Our country's credit rating was downgraded for the first time, just like you'd be downgraded if you didn't pay your mortgage.

This time, they are threatening to actually force the US to default on its obligations for the very first time in history. Now, you'll hear John Boehner and Mitch McConnell and these other Republicans say, we don't want to default. But everybody knows - it's written about in all the papers - that their basic theory is, okay, if the shutdown doesn't work, then we are going to try to get some extra concessions out of the President. We'll put like a long laundry list, all the things that we want that we can't get passed on our own. And if we don't get it, we'll tell them we don't - we won't vote to pay the country's bills. We'll let the country default.

I'm not just making this up. I mean, it's common knowledge. Every reporter here knows it. And I want you to understand the consequences of this. As reckless as a government shutdown is, as many people as are being hurt by a government shutdown, an economic shutdown that results from default would be dramatically worse. In a government shutdown, social security checks still go out on time. In an economic shutdown, if we don't raise the debt ceiling, they don't go out on time.

In a government shutdown, disability benefits still arrive on time. In an economic shutdown, they don't. In a government shutdown, millions of Americans - not just federal workers - everybody faces real economic hardship. In an economic shutdown, falling pensions and home values and rising interest rates on things like mortgages and student loans - all those things risk putting us back into a bad recession, which will affect this company and those workers and all of you. That's not my analysis. That's - every economist out there is saying the same thing. We've never done it before.

And the US is the centre of the world economy. So, if we screw up, everybody gets screwed up. The whole world will have problems, which is why, generally, nobody has ever thought to actually threaten not to pay our bills. It would be the height of irresponsibility. And that's why I've said this before - I'm going to repeat it: There will be no negotiations over this (applause). The American people are not pawns in some political game. You don't get to demand some ransom in exchange for keeping the government running. You don't get to demand ransom in exchange for keeping the economy running. You don't get to demand ransom for doing your most basic job.

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Edited excerpts from remarks by US President Barack Obama on the government shutdown, in Maryland, October 3, 2013