Part of complete coverage on
By Ramy Inocencio, for CNN
January 25, 2013 -- Updated 1120 GMT (1920 HKT)
STORY HIGHLIGHTS
- 'U.S. fiscal cliff still coming' in form of failure to raise debt ceiling, Cantor Fitzgerald CEO
- More than 25% of CEOs feel world economy will get worse in 2013, says PwC survey
- U.S. House of Representatives passed short-term debt ceiling increase Jan. 23
- Lutnick: 'Dumb lending' caused 2008 credit crisis
Hong Kong (CNN) -- The world thought the U.S. fiscal cliff deadline was December 31, but "the fiscal cliff is (still) coming", says Richard Lutnick, CEO of global financial services firm Cantor Fitzgerald.
"You're going to watch the U.S. do crazy, crazy things this year," said Lutnick to CNN's Richard Quest at the World Economic Forum in Davos, Switzerland. "The Republican Party that was elected to control Congress... (is) going to cross their arms and they are not going to raise the debt ceiling ultimately unless they get severe spending cuts, and the Obama administration is not going to give it to them."
If Congress fails to act, the U.S. and the world economy will have a "dreadful" 2013, Lutnick said.
Following this week's PricewaterhouseCoopers survey of global CEO confidence, Lutnick appears to be one of the more than 25% who think the world economy is more likely to deteriorate in 2013.
Despite Lutnick's concerns, on January 23 the Republican-controlled House of Representatives did pass a bill that would allow the U.S. Treasury to borrow new money through mid-May. President Barack Obama has said he would not oppose the proposal if it reaches his desk, although he prefers a long-term debt ceiling increase.
Lutnick adds that to avoid a repeat of the 2008 financial crisis, regulators need to actually address issues that caused it.
"What caused the credit crisis was just dumb lending. When you lend money to people who can't pay you back, you go broke."
Looking ahead to 2013, Lutnick says the biggest risk to global growth is the U.S. hitting the debt ceiling -- whether in the short- or long-term.
"Off the fiscal cliff we go. We (the U.S.) are irrational and we are silly... we are dopey."
Part of complete coverage on
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Cantor CEO: 'Off the fiscal cliff we go'
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