The United States has never defaulted on its debt. But with the way the debt talks are being mired in partisan politics, what may have not happened yet is increasingly becoming a probability. Should Congress fail to raise the current debt limit ceiling, not only will the US economy be affected and many Americans but global markets as well....
>>>The United States has never defaulted on its debt. But with the way the debt talks are being mired in partisan politics, what may have not happened yet is increasingly becoming a probability. Should Congress fail to raise the current debt limit ceiling, not only will the US economy be affected and many Americans but global markets as well.
Among the first the would be affected would be money-market funds holding government securities; banks that resell bonds bought directly from the Federal Reserve to consumers as well as foreign investors that hold about half of all Treasury securities.
Should the U.S. start missing interest or principal payments, borrowers would demand higher and higher interest rates on new bonds. The same thing happened with Greece, Portugal and other countries that had massive debts they could not pay. This negative impact will have a ripple effect that could trigger another financial panic like the one that happened in 2008.
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