How damage from a US debt default could cascade across the global economy
If the debt crisis roiling Washington were eventually to send the United States crashing into recession, America’s economy would hardly sink alone
WASHINGTON (AP) — If the debt crisis roiling Washington were eventually to send the United States crashing into recession, America's economy would hardly sink alone.
The repercussions of a first-ever default on the federal debt would quickly reverberate around the world. Orders for Chinese factories that sell electronics to the United States could dry up. Swiss investors who own U.S. Treasurys would suffer losses. Sri Lankan companies could no longer deploy dollars as an alternative to their own dodgy currency.
“No corner of the global economy will be spared’’ if the U.S. government defaulted and the crisis wasn't resolved quickly, said Mark Zandi, chief economist at Moody’s Analytics.
Zandi and two colleagues at Moody’s have concluded that even if the debt limit were breached for no more than week, the U.S. economy would weaken so much, so fast, as to wipe out roughly 1.5 million jobs.
