Debt Default Would be Death for Wall Street, not the Country

[eridani]

http://www.cepr.net/index.php/blogs/beat-the-press/debt-default-would-be-death-for-wall-street-not-the-country

It is worth noting that Wall Street would be especially hard hit by a debt default. While a default would almost certainly lead to a severe financial crisis, even worse than the one in the fall of 2008, the rest of the economy would lamost certainly recover. We would have the same capital stock, infrastructure, state of technical knowledge and skilled labor force after the crisis as before.

However, the Wall Street banks would almost certainly not recover. They would almost certainly end up in bankruptcy. Their successors would probably never be as powerful in international finance as the current group of institutions. For this reason, Altman and other Wall Street financiers have far more to fear from a default than does the rest of the country. It would have been useful to include a wider range of perspectives on the impact of a debt default.

[lib2DaBone]

1. Repukes wont let the debt ceiling fail.. they LOVE their pieces of SIlver

Where are the DEMS in Congress? What are they doing about jobs, foreclosures and the price of gas?

Oh.. i forgot.. they are out raising corporate money for re-election and voting themselves a raise.

[pnwmom]

2. A crash of the banking system would be a disaster for the whole country

on the scale of the Great Depression. Anyone who thinks otherwise is nuts.

[Lochloosa]

5. +100000000000000000

[inna]

6. uh yeah, that's what the banksters want you to believe, lol

[SDuderstadt]

8. Fucking unbelievable...

I cannot believe that Tea Party orthodoxy has invaded DU.

Actually, I can.

[golfguru]

7. You are just guessing since there is no history

to fall back on. Also, the Treasury can put high
priority of debt service and low priority on such
things as construction projects, funding of arts, military
procurement, etc which can all be put on hold for a while.

[notesdev]

3. Amen!

People who talk about not raising the debt ceiling is if it is the end of the world either work for the banks or don't understand enough about finance to produce a respectable opinion on the subject.

Fundamental to debt is lending. And that's what banks do, first and foremost - they lend. Without debt (and in our particular case due to the way our currency system works, ever-escalating levels of debt), they are screwed!

It boggles my mind to see people on the bottom of the economic scale actually argue for raising the debt ceiling, which ultimately benefits only the bankers.

[eilen]

4. Bernie is unconcerned and so am I.

It is an excellent issue to play chicken against the Republicans with. It's their nature to be recalcitrant and a giant asshole about every issue. They will fold like a lawn chair once their bosses snap their fingers. Just wait.