Why US debt default could cause catastrophic damage to the dollar and its reputation

Congressional leaders at loggerheads over a debt ceiling impasse sat down with President Joe Biden on 9 May, 2023, as the clock ticks down to a potentially catastrophic default if nothing is done by the end of the month. Republicans, who regained control of the House of Representatives in November 2022, are threatening not to allow an increase in the debt limit unless they get spending cuts and regulatory rollbacks in return, which they outlined in a bill passed in April 2023. In so doing, they risk pushing the US government into default. It feels a lot like a case…