The Impending U.S. Default and Its Catastrophic Effects on the Global Economy.

The uncertainty surrounding the negotiations over the US debt limit could have damaging consequences for the economy, even if a deal is struck before the last minute. The long uncertainty could drive up borrowing costs, lead to a pullback in investment and hiring by businesses, and hamstring the financing of public works projects. The standoff could also diminish long-term confidence in the stability of the US financial system, with lasting repercussions. Investors are showing few signs of alarm, but investor sentiment could shift quickly as the so-called X-date, when the Treasury can no longer keep paying the government’s bills, approaches.