Dominoes of Default

THE DOMINOES OF DEFAULT Deficit rises Decrease in tax Increase in cost of federal safety net 642,500 jobs lost revenue GDP decreases 1% 401(k) holders lose $8,816 A new credit crunch Cost of a mortgage increases $19,175 U.S. dollar lose on debt increases $75 billion per year Interest Mortgage rates rise S&P 500 drops 6.3% 0.5% status Treasury bond rates rise 0.5% Treasury bond rates rise 0.5% Lori Montgomery and Brady Dennis, "Treasury quietly plans for failure to raise debt ceiling," The Washington Post, April 26, 2011. Available at: http://www.washingtonpost.com/business/ economy/treasury-quietly-plans-for-failure-to-raise-debt-ceil- ing/2011/04/21/AFM05PIE story.html. U.S. dollar loses special status Neil Irwin, "The dollar, at risk," The Washington Post, May 4, 2011, p. A15. Print. U.S. defaults on debt 642,500 jobs lost Independent Calculation. See William Seyfried, "Examining the Relationship Between Employment and Economic Growth in the Ten Largest states, Southwestern Economic Review, 2005, Winthrop University. Available at: http://www.ser.tcu.edu/2005/ SER2005%20Seyfried%2013-24.pdf; and United States, Department of Labor, Bureau of Labor Statis- tics, "Table A-1," Economic News Release, May 06, 2011. Available at: http://bls.gov/news.release/ empsit.t01.htm. GDP decreases 1%; Mortgage rates rise 0.5% Terry Belton, "The Domino Effect of a US Treasury Technical Default", Research Note, J.P. Morgan, April 19, 2011, p. 5. Print. S&P 500 drops 6.3% Matthew Craft, "How S&P's warning could actually help U.S. debt," Forbes, April 24, 2011. Available at: http://www.forbes. com/feeds/ap/2011/04/24/general-us-wall-street-week- ahead 8432257.html. Based on information from the Third Way Memo "The Dominoes of Default," available at: http://www.thirdway.org/publications/395. For more about Third Way, please visit our website at www.thirdway.org. Illustration by Bill Rapp. third way TES 000 00 THE DOMINOES OF DEFAULT Deficit rises Decrease in tax Increase in cost of federal safety net 642,500 jobs lost revenue GDP decreases 1% 401(k) holders lose $8,816 A new credit crunch Cost of a mortgage increases $19,175 U.S. dollar lose on debt increases $75 billion per year Interest Mortgage rates rise S&P 500 drops 6.3% 0.5% status Treasury bond rates rise 0.5% Treasury bond rates rise 0.5% Lori Montgomery and Brady Dennis, "Treasury quietly plans for failure to raise debt ceiling," The Washington Post, April 26, 2011. Available at: http://www.washingtonpost.com/business/ economy/treasury-quietly-plans-for-failure-to-raise-debt-ceil- ing/2011/04/21/AFM05PIE story.html. U.S. dollar loses special status Neil Irwin, "The dollar, at risk," The Washington Post, May 4, 2011, p. A15. Print. U.S. defaults on debt 642,500 jobs lost Independent Calculation. See William Seyfried, "Examining the Relationship Between Employment and Economic Growth in the Ten Largest states, Southwestern Economic Review, 2005, Winthrop University. Available at: http://www.ser.tcu.edu/2005/ SER2005%20Seyfried%2013-24.pdf; and United States, Department of Labor, Bureau of Labor Statis- tics, "Table A-1," Economic News Release, May 06, 2011. Available at: http://bls.gov/news.release/ empsit.t01.htm. GDP decreases 1%; Mortgage rates rise 0.5% Terry Belton, "The Domino Effect of a US Treasury Technical Default", Research Note, J.P. Morgan, April 19, 2011, p. 5. Print. S&P 500 drops 6.3% Matthew Craft, "How S&P's warning could actually help U.S. debt," Forbes, April 24, 2011. Available at: http://www.forbes. com/feeds/ap/2011/04/24/general-us-wall-street-week- ahead 8432257.html. Based on information from the Third Way Memo "The Dominoes of Default," available at: http://www.thirdway.org/publications/395. For more about Third Way, please visit our website at www.thirdway.org. Illustration by Bill Rapp. third way TES 000 00 THE DOMINOES OF DEFAULT Deficit rises Decrease in tax Increase in cost of federal safety net 642,500 jobs lost revenue GDP decreases 1% 401(k) holders lose $8,816 A new credit crunch Cost of a mortgage increases $19,175 U.S. dollar lose on debt increases $75 billion per year Interest Mortgage rates rise S&P 500 drops 6.3% 0.5% status Treasury bond rates rise 0.5% Treasury bond rates rise 0.5% Lori Montgomery and Brady Dennis, "Treasury quietly plans for failure to raise debt ceiling," The Washington Post, April 26, 2011. Available at: http://www.washingtonpost.com/business/ economy/treasury-quietly-plans-for-failure-to-raise-debt-ceil- ing/2011/04/21/AFM05PIE story.html. U.S. dollar loses special status Neil Irwin, "The dollar, at risk," The Washington Post, May 4, 2011, p. A15. Print. U.S. defaults on debt 642,500 jobs lost Independent Calculation. See William Seyfried, "Examining the Relationship Between Employment and Economic Growth in the Ten Largest states, Southwestern Economic Review, 2005, Winthrop University. Available at: http://www.ser.tcu.edu/2005/ SER2005%20Seyfried%2013-24.pdf; and United States, Department of Labor, Bureau of Labor Statis- tics, "Table A-1," Economic News Release, May 06, 2011. Available at: http://bls.gov/news.release/ empsit.t01.htm. GDP decreases 1%; Mortgage rates rise 0.5% Terry Belton, "The Domino Effect of a US Treasury Technical Default", Research Note, J.P. Morgan, April 19, 2011, p. 5. Print. S&P 500 drops 6.3% Matthew Craft, "How S&P's warning could actually help U.S. debt," Forbes, April 24, 2011. Available at: http://www.forbes. com/feeds/ap/2011/04/24/general-us-wall-street-week- ahead 8432257.html. Based on information from the Third Way Memo "The Dominoes of Default," available at: http://www.thirdway.org/publications/395. For more about Third Way, please visit our website at www.thirdway.org. Illustration by Bill Rapp. third way TES 000 00 THE DOMINOES OF DEFAULT Deficit rises Decrease in tax Increase in cost of federal safety net 642,500 jobs lost revenue GDP decreases 1% 401(k) holders lose $8,816 A new credit crunch Cost of a mortgage increases $19,175 U.S. dollar lose on debt increases $75 billion per year Interest Mortgage rates rise S&P 500 drops 6.3% 0.5% status Treasury bond rates rise 0.5% Treasury bond rates rise 0.5% Lori Montgomery and Brady Dennis, "Treasury quietly plans for failure to raise debt ceiling," The Washington Post, April 26, 2011. Available at: http://www.washingtonpost.com/business/ economy/treasury-quietly-plans-for-failure-to-raise-debt-ceil- ing/2011/04/21/AFM05PIE story.html. U.S. dollar loses special status Neil Irwin, "The dollar, at risk," The Washington Post, May 4, 2011, p. A15. Print. U.S. defaults on debt 642,500 jobs lost Independent Calculation. See William Seyfried, "Examining the Relationship Between Employment and Economic Growth in the Ten Largest states, Southwestern Economic Review, 2005, Winthrop University. Available at: http://www.ser.tcu.edu/2005/ SER2005%20Seyfried%2013-24.pdf; and United States, Department of Labor, Bureau of Labor Statis- tics, "Table A-1," Economic News Release, May 06, 2011. Available at: http://bls.gov/news.release/ empsit.t01.htm. GDP decreases 1%; Mortgage rates rise 0.5% Terry Belton, "The Domino Effect of a US Treasury Technical Default", Research Note, J.P. Morgan, April 19, 2011, p. 5. Print. S&P 500 drops 6.3% Matthew Craft, "How S&P's warning could actually help U.S. debt," Forbes, April 24, 2011. Available at: http://www.forbes. com/feeds/ap/2011/04/24/general-us-wall-street-week- ahead 8432257.html. Based on information from the Third Way Memo "The Dominoes of Default," available at: http://www.thirdway.org/publications/395. For more about Third Way, please visit our website at www.thirdway.org. Illustration by Bill Rapp. third way TES 000 00 THE DOMINOES OF DEFAULT Deficit rises Decrease in tax Increase in cost of federal safety net 642,500 jobs lost revenue GDP decreases 1% 401(k) holders lose $8,816 A new credit crunch Cost of a mortgage increases $19,175 U.S. dollar lose on debt increases $75 billion per year Interest Mortgage rates rise S&P 500 drops 6.3% 0.5% status Treasury bond rates rise 0.5% Treasury bond rates rise 0.5% Lori Montgomery and Brady Dennis, "Treasury quietly plans for failure to raise debt ceiling," The Washington Post, April 26, 2011. Available at: http://www.washingtonpost.com/business/ economy/treasury-quietly-plans-for-failure-to-raise-debt-ceil- ing/2011/04/21/AFM05PIE story.html. U.S. dollar loses special status Neil Irwin, "The dollar, at risk," The Washington Post, May 4, 2011, p. A15. Print. U.S. defaults on debt 642,500 jobs lost Independent Calculation. See William Seyfried, "Examining the Relationship Between Employment and Economic Growth in the Ten Largest states, Southwestern Economic Review, 2005, Winthrop University. Available at: http://www.ser.tcu.edu/2005/ SER2005%20Seyfried%2013-24.pdf; and United States, Department of Labor, Bureau of Labor Statis- tics, "Table A-1," Economic News Release, May 06, 2011. Available at: http://bls.gov/news.release/ empsit.t01.htm. GDP decreases 1%; Mortgage rates rise 0.5% Terry Belton, "The Domino Effect of a US Treasury Technical Default", Research Note, J.P. Morgan, April 19, 2011, p. 5. Print. S&P 500 drops 6.3% Matthew Craft, "How S&P's warning could actually help U.S. debt," Forbes, April 24, 2011. Available at: http://www.forbes. com/feeds/ap/2011/04/24/general-us-wall-street-week- ahead 8432257.html. Based on information from the Third Way Memo "The Dominoes of Default," available at: http://www.thirdway.org/publications/395. For more about Third Way, please visit our website at www.thirdway.org. Illustration by Bill Rapp. third way TES 000 00