Economic effects of debt ceiling standoff.

in us •  2 years ago 

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I see some people conflate the debt ceiling with a government shutdown, but defaulting would be much worse than a government shutdown. It'd cause economic turmoil and significantly raise government borrowing costs. Even if the default was cured quickly, we'd likely see significant effects.

And to be clear there are costs even to this brinkmanship absent a default. That in itself can raise government borrowing costs and cause economic fallout. The 2011 debt ceiling standoff increased government borrowing costs alone by an estimated ~$19 billion over the next decade even without a default.

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