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A Default on the U.S. Debt Would Be Far Worse Than a Government Shutdown. Here’s How.

May 22, 2023


A U.S. default on its debt would have a significantly broader impact on federal operations, financial markets and the global economy than recent government shutdowns that have left ordinary Americans largely untouched.

While the two have been confused frequently during debate over the debt limit, the federal government has had considerable practice with partial government shutdowns during the past decade — unlike a default on the debt, which would be uncharted territory. Treasury Secretary Janet Yellen has warned default could come as soon as June 1 without an agreement between Congress and President Joe Biden.

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