The US government has never defaulted on its debt, but it does occasionally have showdowns over whether or not the ceiling will be raised. Tense negotiations last took place in 2011 and 2013; US fiscal agencies estimate that these stand-offs pushed total borrowing costs up by US$19bn and US$38bn respectively. Risks to the economy are even bigger this time, given that the US is on the edge of a slowdown and rising interest rates have already strained the banking system. There is a high degree of uncertainty over how debt-ceiling talks will play out. We outline several scenarios here, in order of likelihood. Core ... (full story)