Yahoo's Fox News headline: Debt Deadline Approaches: Here’s What Would Happen If U.S. Defaults

[davidpdx]

This is scary stuff but don't panic just yet. Here are three reasons why:

- Even if Congresses misses the October 17th deadline the impact won’t be immediate and the United States won’t be bankrupt no matter what you hear.

- Since 1939 the debt ceiling has been raised an average of more than once a year. In almost every case negotiations went down the last possible minute.

- The number one risk to the U.S. economy is losing the faith of foreign debt holders. Leaders on both sides of the aisle know this would be catastrophic and, while they may take their time coming up with a compromise, the likelihood of such a default is remote.
None of this has to happen. There have been a few close calls, but the U.S. has never officially defaulted on its debt. Despite the rhetoric on both sides this remains a political debate rather than a financial disaster. Emotions are running high but there's still a long way to go before this crisis becomes a global catastrophe.

http://finance.yahoo.com/blogs/breakout/debt-deadline-approaches-happen-u-defaults-175536720.html

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The Republicans want a default so they can try to pin it on Obama. If we default there will be consequences.

[BainsBane]

1. Don't you mean the first one is true?

Because the second isn't.

[davidpdx]

2. I thought it was true that the debt ceiling has been raised every year

As for there being no impact if we default, I don't think that's true. We'd lose our credit rating. Maybe I'm wrong.

[BainsBane]

3. I don't believe it's true negotiations went down to the last minute

"almost every single time." I think it used to be perfunctory.

[davidpdx]

4. Ok, that could be

I guess to find out someone would have to go back and look at every year.

[Tom Rinaldo]

5. "there's still a long way to go before this crisis becomes a global catastrophe."

Bullshit. That's the problem, there ISN'T a long way to go any longer. Even is something short of a catastrophe happens if we miss the deadline for lifting the debt limit by a couple of days and then scramble to fix it, there is still lasting damage done to confidence in America as the safe haven for securities, and there will be an effect on interest rates even if it is less than a dramatic rise. But we have started our slide down the slippery slope in the eyes of the world. Maybe the full catastrophe will wait untill the next round of brinkmanship, maybe ot. Either way it is no longer a long way to go to reach that point. It is quite conceivable it will happen in months if not in days. That is way too close to take any comfort rregardless of what goes down today.