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This is factually incorrect. If we fail to raise the debt ceiling, we still wouldn't default unless our tax revenue failed to cover our interest payments for t
by anonymoushn 16y ago
This is factually incorrect. If we fail to raise the debt ceiling, we still wouldn't default unless our tax revenue failed to cover our interest payments for the year. As it stands, our tax revenue is somewhere between 3 and 5 times the interest payments we pay in a year.
- arethuza 16y agoDoesn't the US government have rather a lot of ongoing expenses that is "has" to pay?
- anonymoushn 16y agoThere is a lot of "mandatory spending," but the portion of that for which the government has a contractual or legal obligation to pay is approximately nothing. Evidence RE: Social Security - http://en.wikipedia.org/wiki/Flemming_v._Nestor http://en.wikipedia.org/wiki/Flemming_v._Nestor
- arethuza 16y agoSo why not do what has happened in the UK - large cuts on government spending and increased taxes explicitly to reduce the deficit.
- jhaglund 16y agoI think the argument here is that we inherited a country which always paid it's debts. If we decide we don't HAVE to pay our debts, then this is a different country, the world will recognize this and we'll find it more painful to borrow. If we abolish every federal institution citizens depend on (social security, medicare, education, etc.) to pay debts, I think you're asking for a revolution.
- davewiner 16y agoIt's much worse than that. We enjoy a special status with the dollar as the reserve currency. We'd probsbly lose that before we defaulted, just the fact that we were considering defaulting would be enough. And without a reserve currencey the world economy would go into a tailspin. http://en.wikipedia.org/wiki/Reserve_currency http://en.wikipedia.org/wiki/Reserve_currency