What happens if America defaults on its debt?
An unimaginable eventuality becomes all too imaginable
The American constitution vests legislative power in Congress. Over the coming days the political body may arrogate to itself a metaphysical power: transforming the utterly unthinkable into hard reality. By failing to raise America’s debt ceiling in time, Congress could drive the country into its first sovereign default in modern history. A collapse in stockmarkets, a surge in unemployment, panic throughout the global economy—all are firmly within the realm of possibility.
This article appeared in the Finance & economics section of the print edition under the headline “Nightmare scenario”
Finance & economics May 27th 2023
- What happens if America defaults on its debt?
- China and Russia compete for Central Asia’s favour
- China’s state capitalists celebrate their soaring shares
- The American credit cycle is at a dangerous point
- What would humans do in a world of super-AI?
- What performance-enhancing stimulants mean for economic growth
From the May 27th 2023 edition
Discover stories from this section and more in the list of contents
Explore the editionMore from Finance & economics
An American purchase of Greenland could be the deal of the century
Donald Trump’s threat of force is wrong. Instead, he should name a price
China’s markets take a fresh beating
Authorities have responded by bossing around investors
Can America’s economy cope with mass deportations?
Production slowdowns, more imports and pricier housing could follow
Would an artificial-intelligence bubble be so bad?
A new book by Byrne Hobart and Tobias Huber argues there are advantages to financial mania
Will Elon Musk dominate President Trump’s economic policy?
He will face challenges from both America firsters and conservative mainstreamers
What investors expect from President Trump
Shareholders are over the moon; bondholders are readying the whip hand