This makes for scary reading.
The United States' politicians are unable to agree on spending and parts of the government have shut down. The US will measure the cost of this in the billions of dollars.
But that is nothing compared with the chaos that could happen across the US, the UK and the entire world if Congress doesn't stop months of fighting in its sandpit and raise its nation's $16.7 trillion debt ceiling by 17 October 2013 at the latest. One week to go at most.
If they cannot agree on a higher borrowing limit, the US could have a cash shortfall of anything up to $30 billion on a daily basis. It is not clear whether President Obama or Congress is legally allowed to say where cost cuts will come from, but whatever is cut will have terrible consequences for many people.
US politicians are not that immature
During two very similar spending-debate situations over the past three years, the Sage of Omaha, billionaire businessman Warren Buffett, forecast that a deal would be done to avoid armageddon. He said that even the US Congress is not capable of that level of immaturity, and he was right.
Now, again, he has told CNBC: We will go right up to the point of extreme idiocy, but we wont cross it.
Most commentators are agreed that a deal will be done. Even if it is not, many, such as Raymond McDaniel, head of US-based, US-regulated credit-rating agency Moody's, find it extremely unlikely that the US will default on its debts.
Instead, it will cut expenditure, perhaps by closing services, reducing state benefits such as pensions, and with cuts to healthcare.
The cuts could easily send the US into a recession, according to Paul Krugman, winner of the Nobel prize for economics. A recession in the US is much more than a butterfly flapping its wings in Japan. The nation will spend less on imports and so its effects will spread across the world.
Potential consequences of a default
But if it fails to repay its debt, that would have the most serious consequences for the globe.
Due to the vast size of the US economy, its banking, insurance and trade connections with the world, and the US dollar's status as the global reserve currency, the former president Ronald Reagan once called the full consequences of a default impossible to predict and awesome to contemplate.
In the past few days, it has been called that abyss, a catastrophe and detonating a nuclear bomb by businesses, economists and politicians around the world.
Why a default would be so terrible
When the investment bank Lehman Brothers collapsed and could not pay its debts in 2008, it caused banks to stop lending and stock markets to fall, leading to job losses. Money was no longer helping the world go round. Lehman's failure nearly caused a global meltdown.
Yalman Onaran, writing for Bloomberg, commented: The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman owed when it filed for bankruptcy on Sept 15, 2008.
Due to the way banks and financial markets are interconnected, the Lehman disaster would have been many times bigger than $517 billion. Had it not received a £700 billion cash injection, other financial institutions would have been dragged down with it.
If the US government defaults, the effects could also be many times greater than the sum of its bankruptcy.
Onaran summarises the cascading network of effects that would occur: A US government default or again, even the whiff of one would cause [the same as Lehman's] to happen, plus it would bring down a bunch of governments and possibly ignite a revolution and a couple of wars.
Imagine a collapse in property prices, the stock market and your pension funds, combined with your employer losing money, cutting jobs or closing altogether, in a similar way to the recent financial crisis but on a much, much larger scale.
The consensus seems to be that those sorts of events will happen if the debt ceiling is reached and not swiftly raised.
18 October might still be ok
Why a default would be so terrible
When the investment bank Lehman Brothers collapsed and could not pay its debts in 2008, it caused banks to stop lending and stock markets to fall, leading to job losses. Money was no longer helping the world go round. Lehman's failure nearly caused a global meltdown.
Yalman Onaran, writing for Bloomberg, commented: The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman owed when it filed for bankruptcy on Sept 15, 2008.
Due to the way banks and financial markets are interconnected, the Lehman disaster would have been many times bigger than $517 billion. Had it not received a £700 billion cash injection, other financial institutions would have been dragged down with it.
If the US government defaults, the effects could also be many times greater than the sum of its bankruptcy.
Onaran summarises the cascading network of effects that would occur: A US government default or again, even the whiff of one would cause [the same as Lehman's] to happen, plus it would bring down a bunch of governments and possibly ignite a revolution and a couple of wars.
Imagine a collapse in property prices, the stock market and your pension funds, combined with your employer losing money, cutting jobs or closing altogether, in a similar way to the recent financial crisis but on a much, much larger scale.
The consensus seems to be that those sorts of events will happen if the debt ceiling is reached and not swiftly raised.
18 October might still be ok
But some believe that the debt ceiling could, perhaps, be reached without a deal, so long as it is temporary.
HSBC strategists Steven Major and Lawrence Dyer think that, even if there is a default, the US will swiftly meet its missed payments when a new debt-ceiling deal is completed, according to Nick Cawley of the Wall Street Journal.
The United States' politicians are unable to agree on spending and parts of the government have shut down. The US will measure the cost of this in the billions of dollars.
But that is nothing compared with the chaos that could happen across the US, the UK and the entire world if Congress doesn't stop months of fighting in its sandpit and raise its nation's $16.7 trillion debt ceiling by 17 October 2013 at the latest. One week to go at most.
If they cannot agree on a higher borrowing limit, the US could have a cash shortfall of anything up to $30 billion on a daily basis. It is not clear whether President Obama or Congress is legally allowed to say where cost cuts will come from, but whatever is cut will have terrible consequences for many people.
US politicians are not that immature
During two very similar spending-debate situations over the past three years, the Sage of Omaha, billionaire businessman Warren Buffett, forecast that a deal would be done to avoid armageddon. He said that even the US Congress is not capable of that level of immaturity, and he was right.
Now, again, he has told CNBC: We will go right up to the point of extreme idiocy, but we wont cross it.
Most commentators are agreed that a deal will be done. Even if it is not, many, such as Raymond McDaniel, head of US-based, US-regulated credit-rating agency Moody's, find it extremely unlikely that the US will default on its debts.
Instead, it will cut expenditure, perhaps by closing services, reducing state benefits such as pensions, and with cuts to healthcare.
The cuts could easily send the US into a recession, according to Paul Krugman, winner of the Nobel prize for economics. A recession in the US is much more than a butterfly flapping its wings in Japan. The nation will spend less on imports and so its effects will spread across the world.
Potential consequences of a default
But if it fails to repay its debt, that would have the most serious consequences for the globe.
Due to the vast size of the US economy, its banking, insurance and trade connections with the world, and the US dollar's status as the global reserve currency, the former president Ronald Reagan once called the full consequences of a default impossible to predict and awesome to contemplate.
In the past few days, it has been called that abyss, a catastrophe and detonating a nuclear bomb by businesses, economists and politicians around the world.
Why a default would be so terrible
When the investment bank Lehman Brothers collapsed and could not pay its debts in 2008, it caused banks to stop lending and stock markets to fall, leading to job losses. Money was no longer helping the world go round. Lehman's failure nearly caused a global meltdown.
Yalman Onaran, writing for Bloomberg, commented: The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman owed when it filed for bankruptcy on Sept 15, 2008.
Due to the way banks and financial markets are interconnected, the Lehman disaster would have been many times bigger than $517 billion. Had it not received a £700 billion cash injection, other financial institutions would have been dragged down with it.
If the US government defaults, the effects could also be many times greater than the sum of its bankruptcy.
Onaran summarises the cascading network of effects that would occur: A US government default or again, even the whiff of one would cause [the same as Lehman's] to happen, plus it would bring down a bunch of governments and possibly ignite a revolution and a couple of wars.
Imagine a collapse in property prices, the stock market and your pension funds, combined with your employer losing money, cutting jobs or closing altogether, in a similar way to the recent financial crisis but on a much, much larger scale.
The consensus seems to be that those sorts of events will happen if the debt ceiling is reached and not swiftly raised.
18 October might still be ok
Why a default would be so terrible
When the investment bank Lehman Brothers collapsed and could not pay its debts in 2008, it caused banks to stop lending and stock markets to fall, leading to job losses. Money was no longer helping the world go round. Lehman's failure nearly caused a global meltdown.
Yalman Onaran, writing for Bloomberg, commented: The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman owed when it filed for bankruptcy on Sept 15, 2008.
Due to the way banks and financial markets are interconnected, the Lehman disaster would have been many times bigger than $517 billion. Had it not received a £700 billion cash injection, other financial institutions would have been dragged down with it.
If the US government defaults, the effects could also be many times greater than the sum of its bankruptcy.
Onaran summarises the cascading network of effects that would occur: A US government default or again, even the whiff of one would cause [the same as Lehman's] to happen, plus it would bring down a bunch of governments and possibly ignite a revolution and a couple of wars.
Imagine a collapse in property prices, the stock market and your pension funds, combined with your employer losing money, cutting jobs or closing altogether, in a similar way to the recent financial crisis but on a much, much larger scale.
The consensus seems to be that those sorts of events will happen if the debt ceiling is reached and not swiftly raised.
18 October might still be ok
But some believe that the debt ceiling could, perhaps, be reached without a deal, so long as it is temporary.
HSBC strategists Steven Major and Lawrence Dyer think that, even if there is a default, the US will swiftly meet its missed payments when a new debt-ceiling deal is completed, according to Nick Cawley of the Wall Street Journal.
