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Debt Ceiling question

Can anyone answer me this question – If we don’t raise the debt ceiling, will that mean we default on our debt?  Or will it mean that we simply cannot borrow more money?

Is it true that the government has, as it’s first obligation, to make debt payments?  If this is the case, then we shouldn’t go into default.  Default is when we can’t make our debt payments. Default is not failure to pay entitlements, right?

So the question is this – if this is the case, then why is everyone talking about defaulting on our debt?  Why are our politicians rousing fear?

If I’m understanding this correctly, an accurate analogy would be to imagine you are a couple who makes $100,000 a year, have various debts that add up to $100,000 and you are debating if you should open up another credit card account.  Open another account would in essence be raising your own personal debt ceiling, wouldn’t it?  You’re still paying on the existing debt, you just don’t take any more debt on when you decide against opening another account.

Maybe I’m totally misunderstanding the situation, in which case, I would appreciate correction.

July 21, 2011 at 1:33 pm
2 comments »
  • July 21, 2011 at 5:02 pmJoe

    Effectively, a failure to raise the debt ceiling imposes a balanced budget right now
    Apparently the debt service gets paid first (no default) then Social Security from the trust fund, and then essential services law enforcement, etc

    There appears to be plenty of money to pay all of this and more
    The safety net unemployment etc is important
    Defending our country constitionally required the military is equally mandated
    Plenty of money for all this

    A question arises whether the federally funded politician give away program Community Block Grant Development program should continue. Each Council person in Pittsburgh is given $70K of federal money to gift for votes. Talk about earmarks or Walking Around Money WAMS

    We might consider cutting the failed stimulus program, aid to teacher’s and other unions, etc
    We appear to have lost $1.2 billion in the Chrysler United Auto Workers union bailout
    http://www.cnbc.com/id/43842416
    but now want to mess with Social Security where folks actually paid in to the program
    Governing is about choices with the taxpayer’s money
    Apparently the US has missed this deadline before without the media hype
    See good Fox News article on link

    http://www.foxnews.com/opinion/2011/07/15/seven-myths-about-looming-debt-ceiling-disaster/

    What’s the media differce this time Obama’s re-election? Only you the voter can decide!

  • July 21, 2011 at 9:09 pmhair growth home remedies

    Makes me think of “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” — Franklin D. Roosevelt

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