[COUNTrecount]

Call me crazy but if you keep borrowing money that you can’t

pay back and make no attempt to pay down the principal or

stop spending, wouldn’t that make you a poor credit risk?

So where is the unexpected surprise?

[wiggen]

Whatever plan reaches obumblers desk won’t cut nearly enough. I suspect that will be the medium term.

[socialism_stinX]

The US Treasury bond market is like a big global savings fund. As long as the global economy continues to grow, we won't ever have to repay the debt. We repay individual bond issues and then issue new debt, i.e., we roll over the bonds into new bonds as they mature. But we do have to pay interest on all the debt, and that interest expense is the real cost of the debt to the American people. We try to minimize that interest expense by issuing mostly short-term debt, but the interest cost is still growing rapidly and is eating up an increasing amount of tax revenue.

A debt downgrade is no big deal, and is already fully expected by the bond market and is fully priced into treasury bonds. If a downgrade occurs, the treasury bond market will sell off for a few weeks at most, and then bounce back to where it was before the downgrade. There won't be any long-term impact on interest rates from a debt downgrade.