Debt Ceiling and Default: Who’s Paid First
This isn't the type of website that tracks closely to the news, but this reported leak by the Administration bears notice.
A recent post was about some commentary that I'm hearing from people to the effect that a federal default might not be such a terrible thing and one of my own observations was that come the early August period, there would still be money to pay some bills. The government would then be in the position of more than a few average Americans, who have to prioritize their bills and decide what gets paid first. One of my great interests would be who gets paid with the available funds and who gets stiffed.
Bloomberg is now running a report by an unnamed Administration official that if the debt ceiling is not raised, then the Treasury Department would assure that the bondholders - frequently foreign creditors and the banking system via the Federal Reserve System - would receive payment ahead of others. Honestly, I'm not certain whether there's legislation that mandates that bond payments supersede other payments but the simple reality is that the US government will give precedence to creditors who own US bonds which mature during that period. Frankly, it doesn't matter even if such legislation exists because the government should never have reached this ridiculous state of affairs. This might simply be a leak to ratchet up pressure upon the Congress, whose members will hopefully fear that the public will blame them for all manner of missed benefits. But it points out two salient things:
- The administration refused as recently as a month ago to specify any order of payments, which they apparently now think makes a major difference in whether some compromise - meaningful or not - is reached.
- The US government has officially placed the American people on notice that bondholders and creditors will be given priority over the citizenry.
So there it is. If you want the government to give a damn, make sure that you lend them some money beyond your taxes.
ARTICLES BY CATEGORY
Basics for Dads
- Back to the Beginning…What is the point of raising a child?
- Volunteering: When Did I Become That Cub Scout Guy?
- Redefining Fatherhood - A Response
- A PracticalDad Look at Concussions
- The Virus Cocktail
- Kids and Pot: Discussing the Long-Term Effects
- Driving Up the Cost of Higher Ed: Bette and the New Educational Baseline
- Driving Up the Cost of Higher Ed: Globalization and the Knowledge-Based Economy
- The Cost of Higher Ed: “How in the Hell Did This Happen?”
- The Kids Are Paying Attention
- If it’s not about me, then who is it about?
- Keeping in Touch as Kids Age
Dad and Mom
- Cancelling Christmas? Yeah, I’m Down With That…
- Is Embarrassment a Disciplinary Tool?
- Controlling Your Kids
- PracticalDad Price Index - September 2016: The Potemkin Village Shelves
- PracticalDad Price Index - August 2016
- PracticalDad Price Index - July 2016: Confirming Deflation
Family / Personal Economics
- PracticalDad Slang: Of Opies, Forcepushing and Duckpecking
- If You Give A Mouse A Cookie, v. 2
- PracticalDad Physics
- Playing With The Kids: How Badly Do I Want To Win?
- PracticalDad Solutions: Uniform Hooks
- “Do I Have To Go?” Taking the Kids Along
- Dystopia Comes Home
- When School Technology Programs Affect Family Policy
- When Does the Academic Push Become Too Much?