The website of the CNN television channel also discusses the possible consequences of the American default. The resource points out that even if Republicans and the White House eventually make a decision on the debt ceiling, there may not be enough time to implement it before June 1.
Market experts believe, CNN continues, that the default will shatter the country’s financial system, although the one-time consequences are not so noticeable.
If investors stop trusting the US government to pay its debts, the cost of government borrowing could rise, especially if the agencies downgrade America’s credit rating.
- noted in the article.
It is not entirely clear whether there will be any immediate delays in the payment of social benefits. The Treasury will have to make difficult choices on the debts to be repaid in priority.
The article states that “the effects will be cascading and worsen as the defect continues”.
Some Republicans have already suggested that a short-term default wouldn’t be catastrophic, CNN adds.
The United States actually exceeded its borrowing authority in January, but Treasury Secretary Janet Yellen authorized “extraordinary measures” to give lawmakers time to act.
- says the article.
Earlier, portal Oilprice.com wrote that the drop in oil prices last week could be a harbinger of a default.
Photos used: Atlas Oil Company
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