Now what happens?
More.On Monday morning the Treasury Department auctioned off the last legally permissible U.S. government debt to the public. A $14,294,000,000,000 cap on borrowing is firmly in place, starting the clock toward potential default and turning up the heat on simmering fiscal negotiations in Washington.
While market participants did not expect Congress to raise the limit before it was met, which should preclude immediate economic consequences, the milestone moves the discussion of American default from theoretical to increasingly probable. Concerns about such a scenario could lead to turmoil in the markets, damaging economic recovery.