3 Reasons Why There Won’t Be a US Debt Default


  1. It is unconstitutional! The Constitution actually forbids that the US defaults on any of its debt. This provision was put in after the Revolutionary War to give people, particularly soldiers, and foreign governments that the US would not do what other countries often did after a war: default. In fact, the US has never defaulted even after the Civil War.
  2. There is no reason for a default. Let’s say that on August 3, the latest drop dead date given by Turbo Tax Timmy Geithner, that the debt ceiling has been reached. All that means is that the President will have to stop making some payments and keeping others. For example, they have to keep sending out checks to Medicare because that is an entitlement. But they don’t have to send checks to Raytheon for building bombers. They don’t have to send checks for a myriad of activities. The point is that there is no need to ever default but it does require the President to make some choices on what is paid and what isn’t. This is not a debt limit problem but a spending problem.
  3. Politicians always seem to find a way to muddle through. They always seem to find a way to craft a compromise at the last minute to get us going through such situations. However, I must say that this time there is more spine in the backs of some Republicans with the Tea Party holding their feet to the fires so it is possible that this last reason is not as compelling as in years before.
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One Response to 3 Reasons Why There Won’t Be a US Debt Default

  1. Paul Bilodeau says:

    Hi Courtney – loved this blog post. too bad the folks in Washington don’t read your posts!!

    I think they are using the noise of “default” to make the people of the country believe they will have actually accomplished something when they “fix the deficit” by the drop dead date. There’s a whole lot more that needs fixing and it should have started years ago!! No one’s got the jewels or following to pull it off so far……….one can hope!!

    Paul

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