TWEED Shire councillor and former mayor Joan van Lieshout, who constantly warns other councillors about the threat of a second global financial crisis predicts that day may not be far off.

But she says Tweed is well placed to survive world-wide economic turmoil if the United States defaults on debts next week.

“What's happening in America is just amazing and I don't think it's going to be a very good outcome,” Cr van Lieshout said.

“America right now is facing a meltdown, unfortunately.”

But Cr van Lieshout predicts the Tweed, largely because of its natural and agricultural attributes, is well placed to withstand the international financial shocks provided we are careful.

“I know what it's like to lose everything overnight,” said Cr Lieshout, who raised children as a single mother before she married millionaire developer and Tweed landholder Peter van Lieshout.

“What we have to do is learn how to survive with what we have now.

“We have a fantastic opportunity to consolidate, pull back and provide a future for the generation coming up.

“We have a very sustainable region. We can go with agriculture... we can diverse and grow all sorts of food. We can go with green initiatives.

“I believe this region can be the model for Australia.”

Cr van Lieshout said the age of consumerism was facing huge challenges as people pulled back from spending with retailers.

“Why should people go out and spend because we want them to?” she asked.

“Every individual has to pull their head in and think we can't afford to do that.

“I've never believed spending is the way out.”

The new chief of the International Monetary Fund Christine Lagarde has warned a default by the United States on its debts if warring US politi- cians can't agree on lifting the nation's debt limit “would be a very, very, very serious event – not for the United States alone, but for the global economy at large”.

With less than a week to go before the United States hits an August 2 deadline when the government runs out of funds to pay its bills, the politicians remain deeply divided on conditions which should apply to raising the $US14.3 trillion ($A13.11 trillion) debt ceiling.

On Monday Democrat President Barack Obama hit out at what he called a “dangerous game” being played by rival Republicans.

President Obama has agreed to deep spending cuts, but Republicans have rejected matching tax increases on wealthy people and big corporations.

He has warned of “Armageddon” if the United States defaults on its debt repayments.