The Global Impact of a US Debt Default on Social Security and Veterans Benefits.

The possibility of a US debt crisis is causing concern in financial markets, with the potential consequences being described as "frightful." The US government's ability to pay its creditors on time is crucial to the smooth functioning of the global financial system, and any default could cause havoc across a range of markets. While negotiations to increase the amount the US government can borrow are ongoing, a default could lead to a deep recession in the US and sink the global economy. The dollar and US Treasuries may enjoy some protection due to their outsized role in international trade and finance, but the fallout from a US default would still be severe.