TALK BACK: How Likely Is Another Financial Crisis if the Debt Ceiling Isn't Raised? UPDATED
UPDATE: Reuters is reporting that the Federal Reserve is "actively preparing for the possibility that the United States could default..." Many of us believed that the Obama Administration and the Republican House would have reached some sort of compromise on the debt ceiling by now. But the Aug. 2 deadline to raise the ceiling is just two weeks away and there is still no sign of an agreement, and few signs of optimism. As was the case with the financial crisis that began in 2008, a default by the government would likely have a severe impact on global financial markets. The Treasury Department says so: “Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations -- an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans -- putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession.” While many in the financial industry anticipate a deal will be cut before the deadline, at least one budget expert is far less certain...
