US Default Could Cause Economic Catastrophe

Betty Liu discusses the possible consequences if the U.S. government does not raise the debt ceiling.
1:14 | 10/08/13

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Transcript for US Default Could Cause Economic Catastrophe
Let's get more on wall street's reaction, from betty liu of bloomberg news. The market's been drifting down. But nothing like a crash, in part because people think that the consequence of default, so bad, that it just won't happen. It would be so unthinkable, george. Catastrophic if it were to default. And bankers say they don't believe washington is that crazy, that reckless, to let this happen. If we were to default, george, markets around the world, tanking. Economists would be warning we're going to slip into another recession. The closer we get to the DEADLINE OF OCTOBER 17th, Markets may seize up a little bit. You're seeing it happen in the bond markets. But the real problem comes when the social security checks have to be paid at the end of the month. November 1st is a deadline. That's when we have to make our first payment. We have an awful choice to pay our lenders like china, or the retirees. And the social security administration sa you might not see your check. That's going to hit 57 million americans who get on average about $280 a week in benefits. And remember, they're seeing their retirement accounts get hit, as well, with the stock market slide. Do not imagine what the reaction will be like. That's right. Thanks very much. Get the rest of the top headlines from josh.

This transcript has been automatically generated and may not be 100% accurate.

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