Setting aside all the possible credit-related issues, what happens to the economy if the federal government suddenly needs to slash spending because it can’t borrow any money? Well, as Michael Ettlinger and Michael Linden note, it would be the biggest shock to overall national spending ever:
This would, if at all sustained, clearly tip us back into recession.
Previous in TP Yglesias
By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.