Bernanke is Wrong - Default will help the economy.

[CurbsideProphet]

The odds of default are miniscule.  Geithner, Bernanke, and even the Whitehouse have said they'll pay on bonds even if the debt ceiling isn't raised.  A more likely scenario is a downgrade.  Even if the ceiling is raised, if it's done at the last hour and with no comprehensive budget plan, S&P has already stated they will downgrade.

Even in the case of a downgrade, it's entirely plausible that Treasuries still rally because in a flight to safety, really where else are you gonna go?  Equities on the other hand may get slammed hard.

 

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[Timo Y]

It would rob millions of ordinary Americans (and non-Americans) of a big chunk of their pension.

That's why it would be highly unethical, even if it's true that it's good for the economy as a whole.