hangover
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- Oct 8, 2013
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Faced with some Republicans shrugging their shoulders at the thought of the U.S. defaulting on its debt obligations for the first time ever, notable economists are warning that the consequences would be the economic equivalent of a swarm of frogs and a plague of locusts.
The worst of the doomsday scenarios painted by economists involve an outright depression, as the effects of missing a debt interest payment cascade through the economy, financial markets and ultimately to Main Street.
While many analysts agree that a default still remains unlikely, warnings are beginning to intensify that Washington is skating too close to a perilous line.
"The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets," banking analyst Dick Bove, at Rafferty Capital Markets, said in a report for clients.
Here are seven of the most immediate and severe side-effects if lawmakers fail to raise the debt ceiling in time to avoid default:
1. Depression and unemployment
2. Dollar down, prices and rates up
3. Down go your investments
4. Social Security payments halt
5. Banking operations freeze up
6. Money market funds break
7. Global markets walloped
7 doomsday default scenarios
Like I said, this is going to hurt the rich a lot more than the rest of us, because they can't deal with being poor. I already know how to be a dumpster diver, and I ain't too proud.
The worst of the doomsday scenarios painted by economists involve an outright depression, as the effects of missing a debt interest payment cascade through the economy, financial markets and ultimately to Main Street.
While many analysts agree that a default still remains unlikely, warnings are beginning to intensify that Washington is skating too close to a perilous line.
"The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets," banking analyst Dick Bove, at Rafferty Capital Markets, said in a report for clients.
Here are seven of the most immediate and severe side-effects if lawmakers fail to raise the debt ceiling in time to avoid default:
1. Depression and unemployment
2. Dollar down, prices and rates up
3. Down go your investments
4. Social Security payments halt
5. Banking operations freeze up
6. Money market funds break
7. Global markets walloped
7 doomsday default scenarios
Like I said, this is going to hurt the rich a lot more than the rest of us, because they can't deal with being poor. I already know how to be a dumpster diver, and I ain't too proud.