The Intelligence from The Economist Raise the roof? America’s debt-ceiling debacle
May 22, 2023
Simon Rabinovich, US economics editor, shares insights on America's looming debt ceiling crisis and the potential global fallout of a government default. Mian Ridge discusses Britain’s evolving surrogacy laws, highlighting how changes could benefit same-sex couples and address parental rights. John Fassman takes listeners on a delightful foraging adventure, diving into the joys of finding wild ingredients like ramps in nature. Together, they explore critical financial, social, and environmental topics that resonate across borders.
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Global Stakes of US Default
- America's debt ceiling crisis poses global risks, as the dollar serves as the world's reserve currency.
- Defaulting could trigger a financial crisis comparable to 2008, impacting global markets and economies.
Consequences of Default
- A U.S. default would have devastating economic consequences, impacting financial markets and employment.
- U.S. treasuries are considered a risk-free asset, so a default would severely disrupt global markets.
Potential 'Plan Bs'
- One proposed solution involved minting a trillion-dollar coin to bypass the debt limit.
- Another involved citing the 14th Amendment, arguing the debt ceiling is unconstitutional, though both face legal challenges.