What Happens If The U.S. Defaults On Its Debt? Here's Why It Won't

What Happens If The U.S. Defaults On Its Debt? Here's Why It Won't

What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act?

Topics covered include:

  • What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy
  • What causes the U.S. to have a perennial debt ceiling crisis
  • Why it is uncertain when the U.S. government would run out of money to meet its obligations
  • What the Biden Administration could do to prevent a default
  • What the Federal Reserve could do to prevent a default
  • Given the ongoing crisis, should you shift assets from stocks to cash?


For more information on this episode click here.

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Show Notes

The Debt Limit Since 2011—Congressional Research Service

7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post

A debt ceiling default would send the U.S. housing market back into a deep freeze by Jeff Tucker—Zillow

Why is federal spending so hard to cut? — Recurring debt ceiling fights will only be solved by budget reform by Linda Bilmes—Brookings

Debt Limit Default Is Default, Even Under a “Prioritization” Scheme by Richard Kogan—Center on Budget and Policy Priorities

Why I Changed My Mind on the Debt Limit by Laurence H. Tribe—The New York Times

The Trillion-Dollar Coin Might Be the Least Bad Option by Annie Lowrey—The Atlantic

If U.S. again risks default, Fed has 'loathsome' playbook by Ann Saphir—Reuters

Related Episodes

169: The Debt Ceiling—What Happens If the U.S. Defaults

416: Your Nation’s National Debt: 5 Things You Need To Know

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