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by
Rick Moran

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October 6, 2013 - 9:20 am
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Judging by remarks made by Speaker of the House John Boehner on This Week, it appears we may find out what happens when a grown-up, adult, first-world country defaults on some of its obligations to creditors.

Boehner let it be known that he doesn’t have the votes to pass a “clean” debt limit bill. President Obama keeps insisting he won’t negotiate on the debt ceiling. This puts the government in exactly the same position it was in on September 30 leading up to the government shutdown: neither side will give.

Except this time, the stakes are much higher. The government had shut down several times previously, with manageable consequences. But Congress has never failed to raise the debt limit, thus assuring the full faith and credit of the U.S. government.

The administration’s problem about predicting catastrophe is that they’ve been crying wolf so often — first with the sequester and now with this latest government shutdown — that few are inclined to believe them. The fact is no one — not the administration, or economists, or experts — can predict with any certainty what is going to happen if we blow through the debt ceiling.

The only thing we’re sure of is that there are few scenarios that don’t predict severe consequences.

Bloomberg reports:

The U.S. will run out of borrowing authority on Oct. 17 and will have $30 billion in cash after that. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

“Congress is playing with fire,” Lew said on CNN’s “State of the Union” today. “If the United States government, for the first time in its history, chooses not to pay its bills on time, we will be in default, there is no option that prevents us from being in default if we don’t have enough cash to pay our bills.”

Unlike past fiscal feuds, this dispute is more about Obama’s signature health law and less about the amount of spending. The U.S. budget deficit in June was 4.3 percent of gross domestic product, down from 10.1 percent in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled by Bloomberg from the Treasury Department and the Bureau of Economic Analysis.

So far, the financial-market response to the political gridlock has been muted.

Give the shutdown and lack of progress on a debt limit bill another week and the markets will probably be singing a different tune. But many observers wonder if Boehner is bluffing. Obama thinks so.

Comments are closed.

Top Rated Comments   
You're right, the only reason for a default is that Comrade Obama chooses not to pay some bill. But, this is the guy who is Barrycading war memorials, so I have no doubt he will and Soros and the Resident's pals on Wall Street and with his sponsoring sovereign wealth funds are already taking short positions.
1 year ago
1 year ago Link To Comment
There is NO reason at all to "default." All we have to pay is the debt service - interest. Last year that was just under $400 billion and estimates show it could be under $300 billion for this year. Federal revenues are over $2.7 trillion.

Oh, there will be spending that can't be done, but there is no reason at all to default.
1 year ago
1 year ago Link To Comment
Maybe it will take a default for the federal government to learn that it can't keep spending without regard to reality? That the debt ceiling is there for a reason, not just to inconvenience the bureaucrats.

I hope not, nut if that's what it's going to take, so be it.
1 year ago
1 year ago Link To Comment
All Comments   (32)
All Comments   (32)
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as Debbie said I'm impressed that someone able to get paid $4020 in four weeks on the internet.. .......:>WWW.JOBS60.ℂOM
1 year ago
1 year ago Link To Comment
my best friend's mother-in-law makes $65/hr on the internet. She has been without work for 6 months but last month her payment was $12869 just working on the internet for a few hours. visit------>>> WWW.Rush64.COM
1 year ago
1 year ago Link To Comment
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REPUBLICAN PARTY (scammers that make look great anyone or anything and regardless of ugliness or perversion = support for democratic party or zionism) AND DEMOCRATS (extremist ZIONIST party) ARE ONE PARTY SYSTEM (self elected democracy = zionist totalitarianism = prison state).

ZIONISM = REPRESENTS FOREIGN(multiculturalism) AND NOT NATIVE WHITE POPULATION IN OUR COUNTRIES. ZIONISM EQUALS TO TERRORIST ORGANISATION(not only because of favoring non whites vs even native whites , but further due to traditional use of terrorism to forcefully rehabilitate CHRISTIAN WHITES - worldwide). United Nations General Assembly Resolution 3379, adopted on November 10, 1975 by a vote of 72 to 35 (with 32 abstentions), " that Zionism is a form of racism and racial discrimination". The resolution was revoked by Resolution 46/86 on December 16, 1991(revoked by father from G. W. BUSH who also created 911).

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1 year ago
1 year ago Link To Comment
The government WILL NOT default. They simply run out of borrowing authority on Oct 17. They are still taking in billions of dollars from taxpayers. Far more than enough to pay the interest on the debt. THEY want to continue to spend what they DO NOT have. Why is preventing that a "bad thing?"
1 year ago
1 year ago Link To Comment
The problem is that, as I understand it, the decision as to which bills to pay is up to Obama. I do not, for an instant, discount the possibility that he will decide to put all the "social" bills ahead of the interest due.
1 year ago
1 year ago Link To Comment
So think about it $5.9 TRILLION in Revenues yet the USURPER and his REGIME are still running a $1 TRILLION a year deficit which has added OVER $7 TRILLION to the National Debt in just over 4 YEARS . Now THAT mr President is irresponsible and UNPATRIOTIC, in your OWN words.
1 year ago
1 year ago Link To Comment
Total 2014 Taxes by Type
Type -yr 2014 +yr
USA's Total Direct Revenue $5.9 trillion
Income Taxes $2.2 trillion
Social Insurance Taxes $1.5 trillion
Ad valorem Taxes $1.2 trillion
Fees and Charges $0.5 trillion
Business and Other Revenue $0.5 trillion
1 year ago
1 year ago Link To Comment
Servicing the USA's debt costs about $400 million per year the USA generates OVER $5.9 TRILLION in Federal Revenues a year. There is no possible chance of the USA defaulting on servicing the debt except by the Govt's own CHOICE. but of course the Low Info crowd are completely oblivious to that and know only what the CORRUPT Politicians and the disgusting, in the Democraps Tank, lap dog Lame Stream EneMedia tells them.
1 year ago
1 year ago Link To Comment
Politically Correct, Multi Culti, 'Yuman Rites' spouting Green NAZI Socialism that is what is killing Western Democracies and Family life. Come and live in a 'Third world' country like Indonesia where there is no WELFARE no FOODSTAMPS no OBAMAPHONES and SUBSIDSED HOUSING and what do you see - STRONG FAMILIES is what you see Community Cohesion and SELF HELP is what you see not Government DEPENDANCE and a VIOLENT LOW INFORMATION CELEBRITY FAWNING DRUG CULTURE as prevails in the West.
1 year ago
1 year ago Link To Comment
Only a CRETIN or a Democrat would believe that RAISING the Debt Ceiling has nothing whatsoever to do with PROFLIGATE Govt Spending and the UPWARDS spiral of the NATIONAL DEBT. So step forward the USURPER, Harry Reid, Nancy Pelosi and Left Wing moonbats and even some deluded RINO's MORONS one and all .
1 year ago
1 year ago Link To Comment
Here's a question for you " Why does the Govt need NON ESSENTIAL WORKERS or more to the point what does the Govt need HUNDREDS OF THOUSANDS OF NON ESSENTIAL WORKERS for" especially in these times of HUGE govt OVERSPENDING and DEBT mountains, because thats who we are told are being furloughed and truth be told can ANYONE see anything different happening in the Country with them all missing . Of course not and thats why the REGIME has to act out of callous , petty, small minded SPITE and close down National Parks and Museums and War Memorials just so you KNOW something is happening. Politicians I have wiped better stuff than they are made of of the soles of my shoes.
1 year ago
1 year ago Link To Comment
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