What happens if nothing is done? There doesn’t seem to be agreement that the world will blow up if the debt ceiling isn’t increased. If we just cut spending NOW why would we even need to raise it?
How much spending can be cut (agreed to by all those elected officials who all have a few programs they will go to the wall for)In the next 2 weeks?
If nothing is done the cost of financing will go up. More of the govts revenue will go towards servicing the debt. I have to think if we default over this issue the ratings companies might take longer to raise our rating back up than they would have in the past.
There will certainly be some checks not paid. Most likely something like not paying doctors and hospitals everything owed them (my guess. easier to stiff an institution than someone relying on a check to eat or pay rent). Defense contractors,stuff like that. Big ones will continue to pay salaries for awhile anyway.
What happens is that we can’t pay bills that are already in the pipeline. As a homey example. Your family has $3,000 a month income, and you have $3,000 a month in bills coming in each month. Suddenly your boss cuts back your hours because of the economy and starts paying you $2,600 a month. So either you don’t pay $400 in bills already committed, or you mess up your credit rating and interest on some of these payments increases. So, what do you do, not pay or go to your credit union and borrow enough to carry you for a couple of months until you can cut back on you living expenses.
If we don’t raise the debt limit we will not have the money to pay our already committed obligations. Thus our credit rating will be damaged, and it will, for reasons too complicated to go into here, end up costing us all more money. For example, I have an equity line of credit at a very good rate of interest. My interest rate will go up which will squeeze my already limited income, as my Social Security has been frozen for 3 years while food, fuel and medical costs have risen.
When we have the debt limit increase, then we can focus on reducing our expenses, and we won’t be paying higher interest rates on the national debt as we would if we ruin our national credit rating.
“What happens if nothing is done?”
No one has explained that and I’m for letting default happenand then see what happens. Whatever happens it can’t be sudden because the U.S. is like 1000 Titanics. Our leaders would have time to take corrective measures.
We citizens aren’t yet able to discern the truth, aren’t yet able to tell the truthtellers from the liers, aren’t yet able to tell the knowledgable from the ignorant.
Given these circumstances we need to go one step at a time. The first step is to let this so-called default happen.