The Five Scenarios of a Debt Ceiling Breach

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October 14 (Bloomberg) -- Bloomberg's economic editor Mike McKee explains the five possibilities in a world where Washington can't resolve a debt ceiling extension by Thursday, October 17th. (Source: Bloomberg)

Surveillance." i'm sara eisen.

We are in a week where we could see a possible government default.

5 -- five possible scenarios.

Michael mckee looking through the crazy technical options.

Thursday is the day they cannot borrow anymore.

That would be between the 23rd and 30th, the dates when we have bills do that exceed the amount of revenue coming in.

That is important to keep in mind.

Only five choices for jack lew.

The number one choice that everyone has on the list is prioritization's. if you pay the treasury people first because bills and cash come in and lumpy payments, you have to say the rest of the government is shut down.

At that point you go into recession and the markets crash.

You will end up in a terrible place.

The second would be a across the board cuts.

That is something that will be another recipe for disaster.

There is no good options.

You could delay payment.

Wait until you have enough money to pay everyone who's bills come in on the same day.

So you end up with another market crash and market problem there.

The 14th amendment as of the top of the list.

The president using the clause about not challenging.

The president says it is not happening.

They ruled that out.

That is an option.

Platinum klein.

-- platinum.

The multitrillion dollar coin.

Some people say there are 1000 smaller clients and carry them around in your pockets.

Hard to say whether you could take it to court or not.

If the market does not believe it, they do not buy the bonds and you have a problem.

What is to say this group will not bring in impeachment charges?

Could all of us get this all this morning it they held a vote in the house?


22 republicans have said they would vote for a clean and that feeling.

All of the democrats get you that.

Did jack lew lay out a credible past forward -- half for work when he testified?


the treasury department has avoided saying what they would -- what they would do.

We think this will go to the 13th hour.

That is a live option it is the 18th.

Everyone goes what will happen?

You will see a market crash that is so bad that congress acts before you default on any bonds.

This is critical.

Everyone is looking for the market to save the day.

Is that true at the white house?

I was talking to somebody last night.

They want to bring everyone into the fold.

They did indicate they would watch the market very closely today.

Everyone is bracing for a negative market reaction.

They say that will give republicans coverage.

Friday peter ortzag joined us and said there is no way that they are not going to pay treasuries.

The default scenario is not that they do not pay treasuries but that they go past the deadline.

That scares everyone because so many people have in their mind that that constitutes default.

The interesting thing is you will see treasury yields go down.

That will be a safety mark.

Joining us this morning, twitter question of the day, how on earth do you plan for u.s. government default?

Tweet us.

This text has been automatically generated. It may not be 100% accurate.


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