Almost every day, there is a new warning of how the US not raising the debt ceiling will cause a cataclysmic debt default that will reverberate through global financial markets.
“The default would cause interest rates to skyrocket,” says the CEA. It would unleash an “economic and financial catastrophe” according to Janet Yellen. “It would have very significant, hard to predict, and likely lasting effects on investors, issuers, and markets alike,” argues Gary Gensler.
Last week the former and current chairs of the Treasury Borrowing Advisory Committee (a club of banks and investment groups that advises the government on its debt issuance) warned that “any delay in making an interest or principal payment by Treasury would be an event of seismic proportions”: