CSM: “Not at all. There is more than enough in the current revenue stream to pay all of the debt obligations. However, the vote buying would certainly be at risk!”
What about the hundreds of billions in other obligations? The million and one things the government buys every month to keep everything going? The salaries? Pensions? Social Security? Medicare payments? Won’t the government default on at least part of those?
I believe the term “default” in this context only applies to the failure to honor *debt* obligations. The only way the US would be in default is if the US Treasury does not pay back the principle on maturing treasury bonds and/or the interest due on existing bonds.
In the last debate about raising the debt ceiling, the Dems and liberals argued that the US Treasury had no authority to prioritize payment of obligations, and therefore any failure to raise the ceiling would automatically put debt (US bonds) obligations into default. This is probably not true. And even if that is true, the current president has not shown much restraint in issuing questionable executive orders. If he really wanted to, he could sign an EO instructing his Treasury Secretary to make honoring US bonds the top priority, and this would make “sure that the full faith and credit of the United States is preserved.”
The Republicans back then tried to pass a law that would make honoring US debt the top priority to prevent a technical default, but of course, the Senate Dems defeated that.
That appears to be the case and it is a very narrow definition of default. If I pay some of my obligations but not others then whether or not I'm in default depends on ones point of view. To those I paid then I'm not in default. To those I stiffed then I am. Let there be no mistake. If there is no increase in the debt limit then the government defaults to somebody. But if that is the only way to force some restraint in spending then the long term gain should outweigh the short term pain. But I'm not holding by breath on anything good coming out of it. The likely scenarion is that the two sides will bluster to the end. The government will get shut down until a clear political loser appears, then that side will cave to the other.