When it comes to their government representatives, most Americans are getting rather frustrated. Just take a look at any of the recent public opinion polls and you’ll see that public opinion of Congress and both the Democratic and Republican parties are at an all-time low.
The recent government shut down is doing potentially irreversible damage to at least one of the parties involved. Furthermore, people are paying attention to the fact that political gridlock is preventing a deal to get through the government to avoid a government default.
If you’ve been out of the loop or don’t understand the intricacies of macroeconomics (don’t feel bad, not many people do!), you might not know how serious a government default could be for the global economy. Luckily for you, we’ve collected some of the most frightening quotes from economists and experts in global markets about just how bad a default would be.
Jamie Dimon of JP Morgan – “As you get closer to it, the panic will set in and something will happen… It would ripple through the global economy in a way you couldn’t possibly understand.”
Wolfgang Schäuble, Germany’s Finance Minister – “A default of the United States is actually unthinkable. The consequences are hard to calculate.”
Anshu Jain – Co-CEO of Deutsche Bank – “It would be utterly catastrophic… This would be a very rapidly spreading, fatal disease.”
Christine Legarde, IMF Managing Director – “If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over, and we would be at risk of tipping yet again into a recession.”
We probably don’t need to worry about all of these problems coming true. The latest headlines show that the government is working towards a deal to prevent a default from occurring. Still, it’s good to know how close we came and how serious the last two weeks have been.