Lawmakers in Washington are embroiled in a heated debate about raising America's $14 trillion debt ceiling, which could have some dire consequences for the Treasury market if it's not increased, according to Jim Millstein, former US Treasury chief restructuring officer.
"There are a lot of people talking about this debt ceiling of being no consequence and we can blow right by it without any consequences, and I just think it's nuts," Millstein told CNBC on Tuesday.
"The government has to be able to borrow and it has to be authorized to do so. This debt ceiling puts a cap on that. If we fail to increase the debt ceiling then the Treasury department can scramble for a couple of weeks, a couple of months maybe, before it would otherwise hit that ceiling, and then we are in default," Millstein explained.