*Unless the administration chooses to. This is ridiculous that a nation as advanced as ours spends all of its time talking about defaulting, as if it would absolutely happen if the debt ceiling isn't raised.
It's not true.
The government will still have cash on hand. The government will still be getting tax revenues(over $2 trillion a year). We will still be able to service our debt.
For a comparison, if you had a job that earns $250,000/year, and a credit card with $1,600,000 in debt, and your minimum payment on that card was $20,000/year... could you pay that interest without taking on more debt? Certainly, you would just have to use $20,000 of your $250,000 to do so. You might have to make cuts somewhere else.
But let's stop being ridiculous. Nobody is going to be forced to default.
If they don't raise the debt limit they will not pay debts as scheduled. That is called defaulting.
So yes, either they will raise the debt limit, or they will default--it is that simple.
The fact the US gov is in possession of other money does not mean they could legally use it to pay debts. This third option you suggest is illegal. They won't do it.
Why won't they pay debts as scheduled? It is the job of Congress and the Treasury to prioritize payments, and the debt is Constitutionally required to be paid. Since the Constitution is the highest law of the land, it would be illegal to default when they can afford to pay it.
Moody's released a memo this last week saying exactly that. The gov has enough money to pay it, and they are going to pay it.
There is nothing keeping them from paying it. If you think there is, I'll have to ask for a source.
They won't do it because it is illegal, and the government is not allowed to break the law in such a clear and overt way.
They also won't do it because it would talk a vote on a complicated bill to even try and make it happen. And if they could get a vote (even on a simple bill like raising the debt limit) we wouldn't be in this mess in the first place.
Why don't you read what I post? It's constitutionally required for us to pay our debts. It's illegal not to.
It's not illegal to pay it, no law can trump the constitution
The Democrats are fear-mongering on this issue. Even Moody's said it's not an issue.
While I agree that the debt limit is in some ways an arbitrary number that doesn't necessarily reflect our ability to pay or not pay our debts, let's not act like the right isn't fear mongering by refusing to immediately raise the debt ceiling.
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