The Economic Consequences of a U.S. Debt Default

Economist Mark Zandi of Moody's Analytics warns that if the US defaults on its debt, it could lead to suspension of Social Security checks or a loss of food stamp benefits, and potentially tip the country into a recession, creating global turmoil. While he believes that lawmakers will reach an agreement, he notes that the politics are different this time, and there is a nonzero probability that lawmakers make a mistake and breach the debt limit. Zandi also expresses concern that there is not enough pressure being applied to the feet of the people on Capitol Hill to reach a deal.