Be afraid. Be very afraid.
That seems to be the overall message from economists on the consequences a U.S. government debt default would have on small businesses and the economy as a whole. Though a default could be avoided by raising the U.S. debt ceiling, it’s still not clear if Congress will reach a compromise in time. Many economists predict that the U.S. would default around October 17.
Even an accidental default in 1979—in which a back-office Treasury Department glitch left $122 million-worth of T-Bills unredeemed—added $12 billion to the national debt, according to the Associated Press, citing a 1989 study. That event would be a wave in the pond compared to the economic tidal wave that a legitimate default would cause today.
Read more on how American small business owners are bracing for another looming financial crisis as the threat of a U.S. default creeps closer and closer.