The article discusses the immediate effects of the U.S. failure to work out some sort of solution to the debt crisis. Aside from a bad day for stocks, the main point of the article discussed the possibility of another credit downgrade for the U.S. If a credit downgrade does become a reality, especially if implemented by a credit rating other than Standard and Poors, how will that affect the rate of interest at which the U.S. borrows? According to the model disucssed regarding interest rates during the Great Depression, a credit downgrade would lead to an increase in borrowing rates, and thus a further contraction of economic growth for the country.
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