The last time the U.S. faced a major showdown over the debt ceiling was a decade ago. Much like today, House Republicans insisted on spending cuts before they would vote to raise the amount of money the government could borrow. Then-President Obama and now-President Biden said they would not negotiate.

Who will blink first? 

Nearly all economists and financial experts say that a debt default would have extremely serious consequences for the everyday economy and America's place in the world.

We look at the massive U.S. debt mountain, which has leverage in the current game of chicken, and discusses why both political parties are so reluctant to get serious about the debt. Our guest, fixed income specialist, and economist, Chris Low of FHN Financial comes up with potential fixes.

This show is an explainer— ideal for anyone who wants to learn about the crisis and understand the fundamental difference between debt and annual deficits. We look at reasons for the huge increase in government red ink in recent years, which include the impact of the COVID pandemic, and recovering from the 2008-9 financial crisis.

U.S. debt is an astonishing six times what it was in 2000— the largest it's ever been compared with the size of the economy. The Government hit the $31.4 trillion legal limit last month, forcing a potential crisis. By law, the ceiling must be raised or the U.S. will fail to pay some of its debts. If this happens, a recession or worse could be one of the consequences.

"If you miss a payment it is a default," Chris Low tells us. "The U.S. credit rating would go from the second highest possible to the lowest possible overnight."

A default "would be painful, and that pain would be felt by every business, every consumer, every household that borrows."

Recommendation: Richard has just read "The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family From a Lifetime of Clutter." During their conversation at the end of the show, Jim says "death cleaning" is a terrible way of describing a sensible practice. Richard suggests that "streamlining" might be easier on the ear.

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