U.S. DOWNGRADE WOULD COST $100 BILLION A YEAR, WIPING OUT ANY DEFICIT REDUCTION

The financial website Zero Hedge reports that the cost of the U.S. debt being downgraded from our current AAA rating would be a whopping $100 billion a year. That’s according to JP Morgan Chase expert Terry Belton who spoke to reporters on a conference call this morning. In short, even if the U.S. does not default, a downgrade alone “will offset any beneficial impact from any deficit reduction that will have to happen for the debt ceiling to be increased.” Belton predicted that a downgrade would cause “a permanent increase in borrowing costs,” which will make it more costly for consumers and businesses to borrow money, risking another recession.