What Happens If The U.S. Defaults On Its Debt? Here's Why It Won't
05/17/23 • 26 min
What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act?
Topics covered include:
- What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy
- What causes the U.S. to have a perennial debt ceiling crisis
- Why it is uncertain when the U.S. government would run out of money to meet its obligations
- What the Biden Administration could do to prevent a default
- What the Federal Reserve could do to prevent a default
- Given the ongoing crisis, should you shift assets from stocks to cash?
For more information on this episode click here.
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Show Notes
The Debt Limit Since 2011—Congressional Research Service
7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post
Why I Changed My Mind on the Debt Limit by Laurence H. Tribe—The New York Times
The Trillion-Dollar Coin Might Be the Least Bad Option by Annie Lowrey—The Atlantic
If U.S. again risks default, Fed has 'loathsome' playbook by Ann Saphir—Reuters
Related Episodes
169: The Debt Ceiling—What Happens If the U.S. Defaults
416: Your Nation’s National Debt: 5 Things You Need To Know
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What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act?
Topics covered include:
- What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy
- What causes the U.S. to have a perennial debt ceiling crisis
- Why it is uncertain when the U.S. government would run out of money to meet its obligations
- What the Biden Administration could do to prevent a default
- What the Federal Reserve could do to prevent a default
- Given the ongoing crisis, should you shift assets from stocks to cash?
For more information on this episode click here.
Sponsors
Use code MONEY10 to get 10% off on your NAPA Autoparts online order.
Masterworks – invest in contemporary art
Masterworks Disclosure:
“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd
Masterworks’ offerings are filed with the SEC, view all past and current offerings here.
Insiders Guide Email Newsletter
Get our free Investors' Checklist when you sign up for the free Money for the Rest of Us email newsletter.
Show Notes
The Debt Limit Since 2011—Congressional Research Service
7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post
Why I Changed My Mind on the Debt Limit by Laurence H. Tribe—The New York Times
The Trillion-Dollar Coin Might Be the Least Bad Option by Annie Lowrey—The Atlantic
If U.S. again risks default, Fed has 'loathsome' playbook by Ann Saphir—Reuters
Related Episodes
169: The Debt Ceiling—What Happens If the U.S. Defaults
416: Your Nation’s National Debt: 5 Things You Need To Know
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at
Previous Episode
Are the Economy and Financial Markets Zero-Sum Games?
Does there need to be a loser for every winner when it comes to investing and economic growth?
Topics covered include:
- What are zero-sum games
- How trading can be a zero-sum game
- Why active management and seeking excess returns through security selections or country weights are zero-sum games
- Why the U.S. stock market has outperformed the rest of the world
- Why economic growth overall is not a zero-sum game, but some aspects of the economy are zero-sum games
For more information on this episode click here.
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Show Notes
With the Odds on Their Side, They Still Couldn’t Beat the Market by Jeff Sommer—The New York Times
The (Time-Varying) Importance of Disaster Risk by Ivo Welch—The Financial Analysts' Journal
The Economics of Biodiversity: The Dasgupta Review by Dasgupta P.—GOV.UK
Why the economy is not a zero-sum game: a simple explanation by Nathan Mech—Acton Institute
Defending the Free Market: The Moral Case for a Free Economy by Robert Sirico
Rents: How Marketing Causes Inequality by Gerrit De Geest
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421: Beware of Survivorship Bias When Investing
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430: How Should Personal and National Wealth Be Measured?
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Next Episode
Don't Be Afraid to Invest In Commercial Real Estate - The Bullish Case for Equity REITs
Why equity real estate investment trusts should be part of your investment portfolio despite the office sector's struggles.
Topics covered include:
- Why some office REITs are down 30% in 2023, and owners are walking away from buildings
- How commercial mortgages differ from residential mortgages
- The broad sector diversification found within equity REIT ETFs
- What have equity REITs performed long-term and what drove those returns
- What is a reasonable return expectation for equity REITs
- Why equity REIT prices adjust more quickly than private real estate values
- Why you should be wary of private REITs
For more information on this episode click here.
Sponsors
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Show Notes
Slow Return to Work Pummels Office Stocks by Peter Grant—The Wall Street Journal
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A Complete Guide to Equity REIT Investing
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