What If The Government Goes Broke?
If Congress and the President can't make a deal to raise the federal borrowing limit, the government could default on its debt on August 2nd. The Federal Reserve Chairman Ben Bernanke, says a default would "create a severe financial shock."The U.S.government debt is considered one of the safest investments around. A default would shake the confidence of investors around the world and drive up borrowing costs for everyone. Financial experts say it is also impossible to predict what might happen with the stock market. many fear we would see a financial collapse we just experienced with the banks. Panic selling on the market might force congress to move quickly after the fact.