Inside, economics editor Dan O'Brien says the chance of defaulting on debts increase in the absence of socialising some of the losses.
"But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt".
Last Tuesday, for example, a well-known finance professor at the Stern School of Business at New York University, Edward Altman, declared that Ford Motor and G.M. had a 46percentt chance of defaulting on their debt sometime in the next five years.
But he warned "we stand a good chance of defaulting" unless Republicans set aside some aside some of their partisan concerns, Reuters reports: A debt default would send interest rates shooting up and the damage to the economy would be greatly magnified "if we don't make sure that the government's paying its bills and that has to be decided this week," he said.
"If Republicans aren't willing to set aside their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting, and defaulting could have a potentially devastating effect on the economy," Mr. Obama told reporters at Martha's Table, a Washington-area food bank.
"My hope is that a spirit of co-operation will move us forward over the next few hours," the president said earlier in the day, adding the ominous note that "if we don't start making some real progress in the House and the Senate, and if Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting".
However, it can also be argued that those lending institutions were picking up the borrowers with the highest chance of defaulting.
Spectrum Brands, maker of Rayovac batteries and Remington shavers, gets a CCC rating because credit agencies think it's got a high chance of defaulting on its debt.
