BBC News
July 5, 2011
Will the US government default on its debt before Greece does? The fact that I can even pose the question tells you we live in peculiar times.
With its next tranche of money from the IMF-EU bail-out now assured, we can say with some confidence that the Greek government will not default next month. Incredibly, the same cannot be said of the US Federal Government.
Just so we're clear: the world is a lot more dependent on the "full faith and credit" of the US than it is on Greece.
A default by the US government - even a temporary, "technical" default - would be a very serious matter, not only for the US but for the global financial system. That is why the smart money has always said it won't happen; that Congress and the White House would come to an agreement in the eleventh hour.
I am in Washington today, and I can report that the smart money is still saying this. It is probably right.
But we are now getting very close to the eleventh hour and - unlike the battle to authorise the budget back in April - this can't be resolved 20 minutes before the government shuts down.
From where we are, default is far from the most likely outcome, but it is certainly conceivable.
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