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Odd Lots

This Is What Happens if the US Actually Hits the Debt Ceiling

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.41.6K Ratings

🗓️ 16 February 2023

⏱️ 55 minutes

🧾️ Download transcript

Summary

The US is in the middle of another debt ceiling fight. The expectation is that it will get lifted before we hit the so called "drop dead" date — but what happens if Congress does not authorize more debt financing? What are the options for the government? Does this automatically lead to default? And if the US does default on its debt, what does that mean for the financial system and the real economy? On this episode of the Odd Lots podcast, we speak with George Pearkes, macro strategist at Bespoke Investment Group, about how the debt limit actually works, and we attempt to get an understanding of what to expect if we reach this uncharted territory.

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Transcript

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0:00.0

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1:17.9

Hello and welcome to another episode of the Oddbots podcast. I'm Tracy Alloway.

1:22.5

And I'm Joe Wyzenthal. Joe, uh, debt ceiling. Oh, I'm so excited. We're doing a trillion dollar

1:28.5

coin episode. I knew I knew you were going to say that. And I just said that to annoy me. Yes,

1:35.1

this is not an episode on the trillion dollar coin. If you are interested in that particular piece

1:42.0

of, um, finance thought experiment, you can check out our previous episode on the topic.

1:48.4

I think it was over an hour long, all about the trillion dollar coin. Yeah. Okay. Check out that

1:55.1

episode if you want to talk about the trillion dollar coin. But today we're going to be discussing

1:58.8

something slightly different. We are going to be talking about what exactly happens if the US

2:04.4

actually does default. Right. Because I think there's like just a lot of uncertainty about this

...

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