U.S. debt default could wipe out 6M jobs and $15T in wealth

>"In real terms, the nation would soon return to high unemployment rates, approaching 9% compared with its current rate of 5.2%. Also, come November 1 checks for millions of Social Security recipients would be delayed, Zandi noted. And stock prices would likely plunge by one-third, sparking that $15 trillion loss in household wealth. Meantime, mortgage rates and other interest rates for things like credit cards and auto loans would spike."

Not sure if this article is alarmist.

Wiping out 1/3 of the stock-market and spike in unemployment if true would have triggered enough entities to force a resolution.

I remember there was a debt-ceiling crisis during the Obama era as well. Is this the same old political maneuvering seen before?

When it comes down to it, the only political faction in the US that actually cares about reducting the deficit are the old school dynasty democrats. Remember, Clinton ran a surplus until Bush spent it all on orphaning iraqis. This is also why the old democrat elites are the most hated faction. Policies that reduce the deficit are boring and unpleasant: raising taxes and cutting spending. Policies that increase the deficit are fun-- Tax cuts! Nation building! Free healthcare! Government stock purchases!?

The debt limit is a completely artificial, political game. Congress passes laws which have costs associated with them. Then they, separately, decide whether they will authorize payment for those laws. The costs should be automatically authorized.

Republicans get to score political points by pretending to control spending, when in fact they raised the limit every time they wanted to give tax cuts to their wealthy donors. It's hostage taking, because they understand that the Democrats will act responsibly. They get to threaten to destroy things as a negotiating tactic.

At some point, the US Dollar is going to lose its global reserve status completely, and we'll face a 50% or greater hit to our standard of living[1].

If they default, it'll be better in the long run for man kind, but it'll really suck for the US for at least a generation.

1 - I'm guessing, based on the 50%ish hit the British took when they lost it.

I’m don’t really know how macroeconomics works too well, and no article about this debacle that I’ve read really explains what the repercussions are of the debt ceiling getting raised higher and higher. Surely this must have some end? Or can we just keep going forever?

As a Brit, can I ask why the US has a debt ceiling, as it seems like when total debt gets close to the ceiling, a vote is passed to raise it - but not before a lot of politician point scoring?

This could also create a shitload of jobs.

Why not just default on the 'debt'. It's not like the Federal Reserve are gonna send the bailiffs around.