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US default is global economy’s ticking time bomb

TOKYO – In July, Fitch Ratings analyst Charles Seville put out a rather perfunctory report on how the US Congress might handle America’s credit rating.

Like most, he assumed lawmakers would be prudent. He spelled out, though, what might transpire if Republicans acted as irresponsibly as they did in 2011, back when Standard & Poor’s yanked away Washington’s AAA status.

“Failure to raise the debt limit in time to prevent a default – in the absence of a formal way of prioritizing debt service – is a meaningful but remote tail risk to the rating,” Seville said.

Not remote enough, it seems.

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