A question : if we do go into default

[Autumn]

who or what gets paid? My husband said that he was watching a show yesterday (on CNN} and they said investors on Wall Street would get their money first. He didn't catch the name, just some republican in an interview. Now of course republican politicians are full of it, but that got me curious.

[Rosa Luxemburg]

1. If we don't get paid then we storm Republican headquarters

I hope that they get the message! I think the general public are clueless in what is going on. They will lose first while the Republican friends - the fat cats continue to smoke their cigars and drink cocktails on their yacht.

[Autumn]

5. I agree that the general public is clueless

and I really don't see a lot of people explaining it very well. I think that the ones in charge prefer us clueless.

[AndyTiedye]

2. If Investors Get Paid We Aren't In Default

[badtoworse]

3. Assuming you used a bankruptcy proceeding as a model,...

Then holders of debt (bondholders and holders of other public debt instruments) would have first call on the available cash. That includes a lot of Wall Street types, but also includes everyday investors who are holding funds that invested in US Treasuries. There is also constitutional backing for this scenario, since the constitution does say that the countries debt shall not be questioned (I paraphased). I would say that SS recipients are probably next. We would probably need to close national parks and furlough lots of non-essential workers to make the available cash cover outstanding debt.

[Autumn]

4. Okay, that makes sense out of what was said

thanks for the explanation.

[alc]

6. It's up to Obama

monthly revenue covers about 55% of monthly spending. Obama has a lot of discretion on which 45% of the budget gets cut. He can cover debt, SS, medicare, and "essential" federal programs (including military/pentagon) with monthly revenue. But he would have to stop a lot of other things (museums, national parks, postal service, dept of ed, dept of energy, Amtrak, etc). A lot of this would be furloughs, others cuts would be missing payments to states (e.g. dept. of edu., pell grants, etc)

He would probably try to make the cuts have a lot of public pain so he can blame republicans and get media attention. I'd guess he will try to not cause actual pain (e.g. stopping SS)

Congress could pass a bill directing him on things that have to be paid. This would probably be debt (since default would be disastrous) and SS (since the house republicans don't want that problem)

[Motown_Johnny]

9. +1

[cbdo2007]

7. I hate to break it to you....but it's impossible for us to default.

This is fear mongering at its finest. There is no possible way for the US Govt to default.

[Autumn]

8. I'm kind of with you. I think it's a manufactured crisis.

I wonder where it will lead.

[Zorra]

10. Here's what Naomi Klein said in a email I got from rootsaction:

RootsAction supporter Naomi Klein pulls no punches in her comments about the debt ceiling charade happening in Washington:

"Using trumped up crisis to raid the public purse and attack the basic rights and benefits is a very old trick - but rarely is the shock doctrine tactic wielded as brazenly as in the pseudo debate about the debt ceiling. This is naked class war, waged by the ultra rich against everyone else, and it's well past time for Americans to draw the line."

[Autumn]

11. " pseudo debate " I think that's about right

I think that if any of them were serious about the deficit the wars would at least be brought up.

[Fool Count]

12. Well, I can think of at least one way for USG to default.

Failing to raise the debt limit will do it with 100% certainty. There is no possible way USG could fulfill all its financial obligations
without borrowing more money. So there you go. I am sure there are other ways too, but presenting just one "possible way" is
enough to definitively refute your statement.