How is reaching the debt limit (and refusing to raise it to yet another, higher level) get to somehow be “Default” of the debt?
If I rack up $20K in my credit card and reach the limit on that card, I am not in default. What I am is at my spending limit and cannot increase the balance on that card….I cannot go rather into debt. I can’t spend more until I pay some of that debt down. I am not bankrupt and am not in default until I fail to make the payments on that card (Principle and interest according to the terms).
So how is failing to increase the debt limit of the United States in any way a “Default”?
I believe its because, in light of the fact that an actual budget hasn’t been passed in years, the Treasury is simply paying out monies that have already been allocated /obligated and the amount allocated is already in excess of the debt limit.
In short, the US Government has already been busy writing checks it knowingly cannot cash unless the debt limit is raised, and those checks are being presented for payment and there are more being presented than there are current funds on hand to pay and thus the debt limit must be raised to create more funds.
To play into your analogy, the government has already spent beyond the limit on the card, and the monthly cycle that catches that and reports an overspend situation is about to occur, and the card can only get moire room on it if the debt limit is raised.
The US government in short is, and has been, living beyond its means for a long time now, with no intent on slowing down or stopping even the increase in spending.
I think Aaron is on the right track. However, in addition to that…the Govt is obligated to write ever more checks on June1 ( Like SS and Medicaid ) . However, the account will already be at its limit…so being unable to write those checks in effect does make the Govt in default as they can’t pay for those obligations. If you were broke and your cards all maxed out and your mortgage payment came due ( or car payment…whatever) you become in default ( assuming the due date is June1).
No money for Social Security, but PLENTY for Welfare…
No money for vets, but PLENTY for MILLIONS of ILLEGAL ALIENS…
I reached my bullshit tolerance right about there…
It’s fear porn. Bullshit lies to scare the sheeple into letting the criminals in power continue their criminality.
Agreed. Both parties should already have a list of ‘We can pay this off now and reduce the debt’ and come to a resolution to pay that off BEFORE increasing the debt. If these lists don’t exist beforehand, it is probably too late to begin negotiating.
If you can’t pay off even a little (10% for example) now, then you are admitting you will never be able to ever pay off the entire debt.
Reaching the debt limit and we need to elevate the debt limit so we don’t default has been tried…how many times….3-40 times….than why don’t we try something else. I mean pushing the debt limit upwards has only allowed the congresscritters to continue to spend…why don’t we try something else like NOT SPENDING!!!!
Hm, unique idea I know, but gees louise, lets try something different for once.