Default: It’s Not Just a Game of Politics

by Clyde Weiss  |  July 29, 2011

It’s not yet clear what a federal default on the nation’s obligations will do to the stock markets, national and municipal credit ratings, and other state and federal government programs like Social Security, Medicare and Medicaid. But it’s pretty certain that states will get hit hard as the U.S. government tries to figure out who to pay – and who to stiff – until the crisis is solved.

The Bipartisan Policy Center says in a report that programs that rely on federal dollars – Medicaid, food stamps, welfare and the like – could be hurt as federal dollars stop flowing.

Unfortunately, no one knows by how much. But do you really think anyone should risk trying to find out?

Check out this chart from Stateline.org to get a better idea of what’s at stake: