If you’re not afraid yet, you should be.
-Catherine Rampell, writing in the Washington Post about the latest debt-ceiling increase showdown in Washington (Treasury Secretary Janet Yellen raised the alarm earlier this week, saying the U.S. government could be out of options to pay its bills by June 1)
Apparently it was not enough that the Republican Party had pushed t**** and his now-convicted seditionist supporters on us for four years.
Now the House Republicans and Speaker Kevin McCarthy want military veterans, social security recipients— and really every American in some way— to pay for the previous Republican administration’s tax cuts.
Here are some scenarios that that will likely play out if the United States indeed defaults on its debt (as reported by Catherine Rampell in the Washington Post):
1. U.S. Treasurys get downgraded — as does virtually every other asset on earth.
2. Interest rates rise further for U.S. consumers, businesses and the government.
3. Global investors likely would sell U.S. dollar-denominated assets as confidence in them evaporates; the dollar might lose value in foreign-exchange markets.
4. Stock markets plummet.
5. Companies holding Treasurys suffer hits to both revenue and balance sheets.
6. There might be a scramble to close out trades that people would otherwise hold.
7. Some of the infrastructure underpinning large parts of the financial system (called “central counterparty clearinghouses”) could essentially get overwhelmed and go down.