The U.S. will default if the debt ceiling is not raised: why do we accept a statement is true

[elocs]

without seriously examining it? After all, here at DU we reject the notion that Social Security will be bankrupt, so why do we blindly accept that the U.S. will default if the debt ceiling is not raised as though it is like "what goes up must come down"?

"The U.S. Treasury will not default":
http://blogs.marketwatch.com/fundmastery/2011/07/12/the-u-s-treasury-will-not-default/

By Kurt Brouwer

Despite all the rhetoric and posturing we see in the media and in Washington D.C., it is safe to say categorically that the U.S. Treasury will not default on its debt after August 2nd, even if the debt ceiling is not raised. Not only will the Treasury be able to pay interest on U.S. debt obligations, but there is money for other essential programs as well. However, there will be some serious cutting that has to happen because spending clearly exceeds revenues.

I believe a debt ceiling limit extension will be enacted. However, let’s consider what might happen if the debt ceiling limit is not raised. Here in a Q&A format is what I believe you need to know at a basic level.

Q: What is a default?

A: In this case, a default would be the failure by the U.S. Treasury to make payments of principal or interest on its debt in a timely manner.

Q: In a given month how much does the Treasury owe as interest on its debt?

A: Roughly about $15–20 billion (more on this in a moment).

Q: How much revenue does the Treasury take in on average in a month?

A: Roughly about $200 billion.

Q: Are you saying the Treasury could pay interest on its debt 10 times over (or more) from monthly income?

A: Yes. Therefore the likelihood of not paying interest on its debt is zero.

[adhd_what_huh]

1. if Treasury looses borrowing authority those who lend

us money will consider us in default because we will always prioritize our security over debt and interest payments.

[Bonobo]

2. You're right. Out of the US's measly pot of gold, they would pay the debt first, BUT...

That would leave only about 180 billon left.

Social Security = 50 billion

Medicaid = 50 billion

Now we're down to 80 billion and we haven't paid our active duty personnel. Oooops.

Nor have we paid any low income assisted lunch programs = starving kids. Oooops.

So, about the default, big fucking deal. The US will still look like a disaster waiting to happen, which it happens to be however this thing works out.

[emulatorloo]

4. If I could rec your post, I would.

[emulatorloo]

3. Your blogger is either delusional or a Republican stooge.

Or a delusional Republican stooge.

[elocs]

7. Evidently you are not familiar with Market Watch which plays regularly on NPR.

I don't see them as delusional or a Republican stooge.

[elocs]

8. Evidently you are not familiar with Market Watch which plays regularly on NPR.

I don't see them as delusional or a Republican stooge.

[Cool Logic]

5. Because everyone (Ds & Rs) in our government tells us so...

And they think we are too stupid to realize that they are lying.

However, the truth, is as you say, "The U.S. Treasury will not default." For unlike politicians, numbers do not lie.

http://www.fms.treas.gov/dts/index.html

[elocs]

9. dupe

[still_one]

6. If we technically default, which is what it will be, there will be a liquidity crisis period /nt