In short, a default would be an economic cataclysm
. Interest rates would spike, the stock market would crater, retirement accounts would take a beating, the value of the US dollar would erode and the financial reputation of the world’s only superpower would be tarnished.
“It would be financial Armageddon,” Mark Zandi, chief economist at Moody’s Analytics, told CNN. “It’s complete craziness to even contemplate the idea of not paying our debt on time.”
But it’s a crazy world.
Lawmakers in Washington are again playing chicken with America’s creditworthiness. And the path to raising the debt ceiling is not clear.
Even though Congress has in the past raised the debt ceiling with a bipartisan vote, Senate Minority Leader Mitch McConnell vowed
in July that Republicans will not vote to raise the debt ceiling.
JPMorgan Chase (JPM)
CEO Jamie Dimon urged lawmakers not to even think about going down this path again. During a hearing in May, Dimon…