While the country anxiously waits to see if lawmakers can raise the debt limit before the August 2 deadline, a few economists and financiers are emphasizing the importance of a long-term financial solution to the deficit, even if that results in a temporary default. They question the lasting effects of a default in terms of investor confidence, citing the reputation and dominance of U.S. currency in financial transactions.
Louise Story, Wall Street and finance reporter for our partner, The New York Times, discusses the implications of a default. The overall effect may be to calm international markets while programs and people here at home suffer. She reported this story for yesterday's paper.