Consider that, next time you shout "Shut it down."
If America defaults, our credit rating will automatically drop to a ‘D’, causing the stock market to go into meltdown, which will lead to massive lay-offs in the private sector. The military won’t get paid, social security won’t go out, federal workers will be furloughed, and many many people will be out of a job. Hence, people won’t be buying jack squat, leading businesses such as grocery stores to slump. The economy will continue to slump lower and lower, leading to more and more job loss.
Consider that, next time you shout “Shut it down.”
and borrowing more money prevents this how? Lets get the shyt in the fan now and get it over with. we’d becoming out of this by now if they had allowed it to happen before tarp.
But a default can only happen if the Treasury Department and the Executive Branch decide to not spend the tax revenue to pay interest on outstanding government debt. Worst case, they have to make sudden cuts in other programs, but keep paying the interest on their debt.
Even without increasing the debt ceiling the Treasury can re-sell any redeemed T-Bills. That provides extra liquidity to handle redemptions, etc.
Don't buy the propaganda -- what is going on in DC is a lot of political posturing. The biggest sticking point for Democrats is having to vote again on the debt limit increase before the next election. Do you really think they would risk a catastrophic melt down of the economy, and the resulting political fall out for that? Of course not, they know that they can always raise the debt ceiling on a short term basis, and they know that even without raising it they can keep the markets and the government operating for a while.