Treasury: Even talking about default hurts economy
October 3rd, 2013
10:50 AM ET
10 months ago

Treasury: Even talking about default hurts economy

New York (CNNMoney) - The United States has never willfully defaulted on any of its legal obligations. So the consequences of doing so are unknowable.

But the general consensus is that it could be catastrophic. Or, in the best-case scenario, seriously damaging to the economy.

FULL STORY

Filed under: Debt • Government Shutdown • national debt • Treasury
soundoff (33 Responses)
  1. Tampa Tim

    Billionaires like the Kochs have been trying to shut down the government for years. They have spent a lot of money getting stupid people on their side(aka, Bachmann, Gomert, King, And Boehner). It looks like the oil and coal industry are living in the House of Representatives.

    October 3, 2013 11:02 am at 11:02 am |
  2. rs

    "So in the event of default, it's not unreasonable to expect those kinds of effects and more. Treasury noted that "many private-sector analysts believ[e] that it would lead to events of the magnitude of late 2008 or worse"
    _______________________
    If the full-failth-and-credit of the United States is to be challenged, and the above statement is a possibility, it would seem reasonable to give the House Republicans a brief period shy of the deadline to recind their threats, pass a clean funding bill and then we move on. Beyond that, arrest and treason and/or terrorism charges (just as we would do for any other run-of-the-mill terrorist) would seem completely appropriate.Holding the government hostage is not something anyone should get away with without severe consequences.

    October 3, 2013 11:04 am at 11:04 am |
  3. The Real Tom Paine

    I guess that explains the obcession the GOP has with shutting the government down. Nothing presents an opening for the Far Right for their Ayn Rand-inspired social engineering like an economy they have deliberately cratered, along with all the money that has been flowing up the social ladder. They talk about a society with opportunity, but are doing their damndest to create one that looks more like Mexico than the US. Ah, don;t you just love the smell of far-right oligarchies?

    October 3, 2013 11:07 am at 11:07 am |
  4. Tampa Tim

    Republicans are bordering on treason. They should be given the opportunity to resign or go to trial.

    October 3, 2013 11:09 am at 11:09 am |
  5. Lynda/Minnesota

    "But the general consensus is that it could be catastrophic. Or, in the best-case scenario, seriously damaging to the economy."

    Who will be parading around with their "Mission Accomplished" signs first, I wonder? Ted Cruz? Michele Bachmann (who by the way is on her last term, what does she have to lose?) John McCain? John Boehner? Mitch McConnell? Rand Paul? Paul Ryan? Sarah Palin? Rush Limbaugh? Sean Hannity? Glenn Beck?

    Feel free to add your own favorites, my fingers are getting stiff.

    October 3, 2013 11:09 am at 11:09 am |
  6. Sniffit

    "Holding the government hostage is not something anyone should get away with without severe consequences."

    IOKIYAR

    October 3, 2013 11:11 am at 11:11 am |
  7. Tampa Tim

    Where is the Canadian born Cuban who serves as speaker of the house? Did he decide to hide when he found out that shutting down the government over an ever increasing health care law was insane?

    October 3, 2013 11:14 am at 11:14 am |
  8. Tampa Tim

    Increasing in popularity. . . Sorry.

    October 3, 2013 11:15 am at 11:15 am |
  9. sifto

    the POTUS, of all people should not be fear-mongering about a default–which will not happen–

    October 3, 2013 11:16 am at 11:16 am |
  10. Dutch/Bad Newz, VA -aka- Take Back The House -aka- No Redemption Votes

    Wall St., go talk your paid for republicans. They screwing up the chicken.

    October 3, 2013 11:16 am at 11:16 am |
  11. Jeff Frank (R-Ohio)"Right Wing Insanity"

    I'm not to keen about the idea of sending my mortgage payment to China.

    October 3, 2013 11:22 am at 11:22 am |
  12. rs

    For fun- go to the Web, and read a foreign newspaper today. The damage the GOP is doing to our reputation and future economy is there to be seen. It's funny that foreigners see the threat from the Right in the U.S., but as a nation, we apparently do not.

    October 3, 2013 11:23 am at 11:23 am |
  13. Tampa Tim

    The rest of the world is laughing at the stupidity of the Republican Party. Soon they will realize thar the GOP is America's worst enemy.

    October 3, 2013 11:30 am at 11:30 am |
  14. Rudy NYC

    The Tea Party has been predicting for years that the ACA would wreck the economy beyond repair. It appears that they are making good on fulfilling their predictions. Government shutdown is what most all of them campaigned on when they ran for office.

    Most Tea Party members are satisfied that discretionary spending has been cut to zero. They campaigned on cutting spending and more. Just about all of them have stated that they would like to get rid of the Treasury Department, including Sen. Rand Paul. They also swore oaths to never again raise the debt ceiling. If they're not stopped, and soon, they will totally wreck our nation's economy and throw the global financial markets into complete chaos.

    October 3, 2013 11:32 am at 11:32 am |
  15. Paula Scholzen

    If only ALL working Americans should start refusing to pay their federal taxes which pays their salaries we might see a change. Yes, we voted them in office, but we can always vote them out!

    October 3, 2013 11:32 am at 11:32 am |
  16. Rudy NYC

    The Real Tom Paine

    I guess that explains the obcession the GOP has with shutting the government down. Nothing presents an opening for the Far Right for their Ayn Rand-inspired social engineering like an economy they have deliberately cratered, along with all the money that has been flowing up the social ladder. They talk about a society with opportunity, but are doing their damndest to create one that looks more like Mexico than the US. Ah, don;t you just love the smell of far-right oligarchies?
    ----------------
    Herman Cain warned us when he was leading the polls, back in 2011. He said, "If you're not rich by now, it's your own fault.

    October 3, 2013 11:35 am at 11:35 am |
  17. Anonymous

    We need to set a designated prayer day to save us from the Tea party/GOP. Only GOD can

    October 3, 2013 11:40 am at 11:40 am |
  18. Sniffit

    "Treasury: Even talking about default hurts economy"

    Which is why the GOP/Teatrolls won't shut up about threatening it and why they only want to agree to very short-term increases...so it an keep coming up over and over and they can keep the economy's recovery hampered.

    October 3, 2013 11:41 am at 11:41 am |
  19. Anonymous

    OK, maybe now the Senate should send back a bill combining the CR and debt ceiling limit. Maybe throw in some gun control, immigration reform and an infrastructure stimulus to create jobs, etc. Can you imagine how the right would go berserk? The previous blogger who said internationally this is really hurting the reputation of the US is very true.

    October 3, 2013 11:43 am at 11:43 am |
  20. rs

    Anonymous

    We need to set a designated prayer day to save us from the Tea party/GOP. Only GOD can
    __________________
    It cannot hurt, but I'll put my faith in federal marshals and the Justice Dept.

    October 3, 2013 11:47 am at 11:47 am |
  21. truth hurts but reality bites

    The government collects FAR more in tax revenue than the interest costs of the debt. There is always plenty of money to pay the interest costs of the debt, at the moment. If the USA defaults, it will be because the incompetent Obama adminstration willfully chooses to default.

    Now if the debt limit is not increased, then the Obama adminstration will have to determine which federal government programs are the highest prority and cut the rest or raise taxes to cover the rest. It is called instant balanced budget. It is probably the ONLY way Obama and the Democrats will EVER balance the budget. After 5 years of dismal growth, it is clear they know nothing about growing the economy enough to help the deficit problem.

    October 3, 2013 11:47 am at 11:47 am |
  22. tom l

    250 billion taken in receipts each month. Interest payments are about 7 billion. I think we're fine in paying our debts if we really want to. Why would we default unless we wanted to?

    Repubs like to scare people with wars. Dems like to scare people with things like this. No difference.

    October 3, 2013 11:48 am at 11:48 am |
  23. Anonymous

    I guess Arkansas quit being a state. Why are the House and Senate members from Arkansas not listed?

    October 3, 2013 11:48 am at 11:48 am |
  24. The Real Tom Paine

    -Rudy NYC

    The Real Tom Paine

    I guess that explains the obcession the GOP has with shutting the government down. Nothing presents an opening for the Far Right for their Ayn Rand-inspired social engineering like an economy they have deliberately cratered, along with all the money that has been flowing up the social ladder. They talk about a society with opportunity, but are doing their damndest to create one that looks more like Mexico than the US. Ah, don;t you just love the smell of far-right oligarchies?
    ------
    Herman Cain warned us when he was leading the polls, back in 2011. He said, "If you're not rich by now, it's your own fault.
    ***********
    The late Tom Clancey once said that if you do not earn a least 250K a year, you are a failure. Its comments like that that bring to mind Santorum's comment about Obama wanting to make college education available to anyone: " What a snob". Having gone to both private and public schools, and having gone to both private and public universities ( earned degrees from both colleges), I can say without hesitation that money, while certainly an enabler, is as much a gauge of your contempt for your fellow man as it is of your own success.

    October 3, 2013 11:49 am at 11:49 am |
  25. truth hurts but reality bites

    Sniffit
    the economy's recovery hampered.
    --–

    Correction: hamper the dismal, barely visible, joless recovery.

    October 3, 2013 11:50 am at 11:50 am |
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