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If the US defaults on debt, expect the dollar to fall

Mount Equity Group Tokyo, Japan > News > Markets > If the US defaults on debt, expect the dollar to fall

(The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts.)

(THE CONVERSATION) Congress has seemingly kicked the debt ceiling deadline down the road – but the threat of a future default still exists.

On Oct. 7, 2021, lawmakers in the Senate agreed to extend the government’s ability to borrow until December. It came after Senate Minority Leader Mitch McConnell offered a temporary suspension to the debt limit, averting a default until at least December. But at that point, Democrats would have to find a way to raise the debt ceiling on their own – something they’ve said they won’t do.

This isn’t the first time Republicans have resisted helping a Democratic president raise the debt ceiling.

As an economist, I know that this political game of chicken has real-life consequences – even if it…

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