Market Extra: Failure to hike debt limit could be ‘more catastrophic’ than Lehman collapse, says S&P

Economists from S&P Global Ratings warned that a failure to avert a government shutdown could trim 0.2% from fourth-quarter GDP growth, or at least $6.5 billion, with every week it continues.

“Failure to raise the debt limit would likely be more catastrophic to the economy than the 2008 failure of Lehman Brothers and would erase many of the gains of the subsequent recovery,” said Beth Ann Bovino, S&P Global Rating’s U.S. Chief Economist author of the report entitled, “With a shutdown, there will be blood.”

‘Betting on a rational U.S. government can be risky.’

Beth Ann Bovino, U.S. chief economist

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