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What happens if the treasury runs out of money? Does government shut down? Do they pick and choose which agencies cease to operate until more tax $ show up? Do
by givemeethekeys 3y ago
What happens if the treasury runs out of money? Does government shut down? Do they pick and choose which agencies cease to operate until more tax $ show up? Do they prioritize interest payment over other expenses?
- HDThoreaun 3y agoFirst they try a myriad of loopholes that have never been tried. These include the fabled "trillion dollar coin" as well as an executive order based of a clause in the fourteenth amendment. After that I think it's up to Biden to focus on bond repayment versus shutting down services. We've had government shutdowns before, surely the same thing that happened then would happen again. National parks shut down and non essential federal services have employees furloughed. The real answer though I think is that we don't really know and it's up to the courts.
- eclipticplane 3y agoWe've never faced shutdown due to the debt limit. We've only ever faced shutdowns due to budgets not being passed. Both are awful. But the former is _far_ worse.
- MuffinFlavored 3y agoWhat was the process in which the U.S. passed legislation to inject capital into the system through the Federal Reserve + Treasury during COVID relief? Why can't/won't that happen here?
- UncleOxidant 3y agoThe problem is that "pass legislation" part.
- MuffinFlavored 3y agoWhy were the same legislators willing to print money for COVID relief but not US debt ceiling? Isn't it a basic law of economics that the debt ceiling needs to be readjusted basically annually due to inflation since it's denominated in dollars, which are inflating slowly every month?
- 988747 3y ago[dead]
- _8j50 3y agoThey can't run out of money. The default has to do with their refusal to pay debt obligations without congress authorizing them to do so.
- hackeraccount 3y agoYes. The last thing you stop paying is interest. The first is stuff that everyone sees - think National Parks. The next is stuff that nobody cares about- think AFDC and medicaid, then you stop paying the military, then you stop paying the stuff that everyone cares about - Social Security and Medicare.