One possible consequence of defaulting on the national debt? Well, according to the director of the Congressional Budget office, it could ... increase the deficit:
Elmendorf noted that one of the potential consequences of even a brief period of default would be higher federal debt, triggered by a spike in interest rates and, thus, higher interest payments on federally issued debt.
?If Treasury rates moved up by just 10 basis points over the next decade, that would add $130 billion to interest payments over the decade,? Elmendorf said. A basis point is one-one hundreth of one percent. Thus, according to Elmendorf, each 0.1 percent increase in interest rates on U.S. Treasuries would amount to a significant increase in U.S. debt.
Source: http://feeds.washingtonpost.com/click.phdo?i=012a707dc953d222a77667ec629a20f1
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