Wednesday, October 9, 2013
Why Worry About A US Debt Default?
Many GOP politicians, and many in the media who feed red meat to the GOP base, do not believe that a US default would have much of an impact on the global economy. Some even argue that it would be good thing. Nobody really knows how a default might play out but it could be much worse than what happened after Lehman went into bankruptcy. This article describes some of the events that would be triggered by a default. Much of the analysis comes from Wall Street investors who have a better understanding about the role of US treasuries in financial markets than members of the US House and the financial wizards on Fox News. They may overstate the case but it might even be worse than they imagine. Some members of the House seem willing to trade the risk from a default against the risk of Obamacare. They are also prominent deniers of the risk from global warming. Its hard to imagine what the rest of the world thinks about the US when as they learn more about the politicians that make our laws and the people who elect them to office.