The United States is beginning to resemble 17th century Poland. On 2nd August, if no deal is reached, the US government will reach its debt limit. It will not be allowed to borrow from financial markets still utterly enchanted by the opportunity to toss trillions its way. Social security cheques might not get mailed, federal workers might not get paid, maturing bonds could default. It would be an own goal of disastrous proportions. Financial markets regard US debt as the safest possible, the ultimate risk-free asset, the base line upon which all other bonds are priced. If the US threatens default, the reaction will be calamitous: the world economy will be battered. It would make Lehman Brothers and Greece look like momentary blips.