Answers to Your Debt Limit and Default Questions

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  • Q. Could President Obama Ignore the Debt Limit?
  • Q. What do Global Investors Thinking, Are they Panicking?
  • Q. What Would Be the Economic Impact?
  • Q. Is the Debacle About an Out-Of-Control Budget Deficit?
  • Q. Why is it Potentially Catastrophic for the Government to Default?
  • Debt Ceiling Dilemma
  • Q. What is the Debt Ceiling?
  • Q. How Close Is the Nation to the Limit?
  • Q. What Will Happen After Oct. 17?
  • Q. When the Government Runs Out of Cash Will It Default?
  • Q. Couldn’t the Government Simply Print More Money?
  • Q. If They Can’t Print More Money, What Else Could Treasury Do?
  • Q. Would Delaying Payments Avoid a Default?

Q. What Would Be the Economic Impact?

A. No longer able to borrow, the government could spend only from its revenue from taxes and fees. This would ignite an immediate spending cut of 32 percent, the Bipartisan Policy Center estimates. If the debt limit wasn't raised through November, Goldman Sachs estimates that government spending would be cut $175 billion or about 1 percent of the economy.

(Photo: Chris Hondros/Getty Images)

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