In its 247-year history, the United States of American has never defaulted on its debt. However, with each passing year, the amount of debt surges higher and will ultimately reach a point where these debt obligations can no longer be met. Many question if that time is now. Secretary of the Treasury, Janet Yellen has issued several warnings to top ranking officials saying that the US will run out of money around June 1st of this year. If the government is not allowed to raise more debt (the debt ceiling), then a default may become a very real reality. While it is important to note that a U.S. government default is considered highly unlikely due to the country's economic strength and the significance of U.S. Treasury securities in global markets, there is always a chance. So, what would happen if the political stalemate and posturing by the Republicans and Democrats cannot be resolved?
A potential default by the U.S. government on its debt would have far-reaching consequences, both domestically and internationally. We would see significant impacts in the following areas:
