Felix Salmon (Reuters): The default has already begun, The best way to look at this, I think, is that there's a spectrum of default severities. At one end, you have the outright repudiation of sovereign debt, a la Ecuador in 2008; at the other, you have the sequester, which involves telling a large number of government employees that the resources which were promised them will not arrive. Both of them involve the government going back on its promises, but some promises are far more binding, and far more important, than others. Salmon says faith in US institutions has already been undermined. The mechanism by which catastrophe would arise has already been set into motion and as a result, economic growth in both the US and the rest of the world will be lower than it should be, unemployment will be higher and social unrest will be more destructive. (VIEW LINK)
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