The collapse of Lehman Brothers Holdings completely shook the financial market, and it does not even put a small dent in comparison to the government’s debt, a major figure in the investment world said this week. To put the debt ceiling problem into perspective, the outstanding government debt is currently 23 times the $517 billion Lehman owed when it filed for bankruptcy. Per Bloomberg:
“If it were to occur — and it’s a big if — one would expect a series of legal triggers, potentially transmitting the default to many other markets,” said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., the world’s largest fixed-income manager. “All this would add to the headwinds facing economic growth. It would also undermine the role of the U.S. in the world economy.”
