Obama Says Debt Default like Nuclear Bomb on the Economy: Um Yeah Pretty Much

I have to agree with Obama for once because he is exactly right on this point.

Throughout the hourlong question-and-answer session, during which he was not asked about Obamacare’s botched roll-out, the president took pains to counter lawmakers whose argument he mocked as “let's take default out for a spin and see how it rides.”

He called that an “insane” policy that would have a “catastrophic” impact on the economy, spreading “chaos” and even precipitating a “worldwide catastrophe.”

You don't need scare quotes because all of those things are dead-solid facts. If we default on our debt it would be the greatest man-made economic catastrophe in American history bar-none. It will devastate world credit markets, the stock market, the bond market, the repo market, the dollar, the mortgage market, and would probably be the reason that many banks in the US will go bankrupt. 

It will damage the economy of every major trading partner and will put us in a depression and the rest of the world in a deep recession for at least a year. It will probably freeze all credit markets for 3 to 6 month in which time some companies might not even be able to make payroll depending on their balance sheets.

Every American from the fat cat Wall Street banker to the kid that bags groceries at Safeway would feel it some way. I have read some reports of people stocking up on cash and buying water and food like a hurricane was bearing down on them. These are the smart people because in many ways a debt default will be longer-lasting then any hurricane could ever be.