U.S. debt default
With Congress moving like molasses and time running out, more and more Americans are wondering what happens when we hit the debt ceiling.
The short answer is that it would be bad - as in catastrophically, you've-never-seen-anything-like-this-in-your-life bad.
"[It] would be like the financial market equivalent of that Hieronymus Bosch painting of hell," Michael Feroli, chief economist at JP Morgan, told the Washington Post.Brace yourself, because this is what a default would look like...
U.S. Debt Default Would Be Worse Than Lehman Brothers Collapse
Each day that passes without a deal to prevent a U.S. debt default brings the United States closer to a financial calamity that would be more severe than the failure of Lehman Brothers in 2008.
Dueling speeches from U.S. President Barack Obama and Speaker of the House John Boehner, R-OH, Monday night did nothing to resolve the impasse between Republicans and Democrats over how to reduce budget deficits and raise the debt ceiling past the $14.3 trillion limit by Aug. 2.
The contentious rhetoric of recent days has raised concerns that lawmakers will fail to reach a compromise by the deadline - with disastrous consequences.
"I've never, never seen a breakdown like this," Paul Light, a U.S. government scholar, told Reuters. "This is a defining moment in America's inability to act."
Should the deadlock over avoiding a U.S. debt default endure past Tuesday's deadline, it will trigger a financial crisis of vast proportions:
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