What A Debt Default Would Really Mean For The U.S.

National Public Radio (NPR)
Jul. 5, 2011

Washington lawmakers returned from a long holiday weekend on Tuesday, with just four weeks left to raise the federal debt ceiling or run the risk of a government default.

Many lawmakers insist that they won't vote to raise the debt limit unless there's also a deal to cut the deficit.

That would leave the government, which now borrows more than 40 cents of every dollar, suddenly without a working credit card.

"That means after Aug. 3, we'd be entirely dependent upon incoming cash flows to pay our bills," says Jay Powell, who served as undersecretary of Treasury during the first Bush administration.