Treasury will not allow a default even if Congress does not raise debt ceiling

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The U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official.

...

The Treasury has said about $90 billion in debt matures on Aug. 4 and more than $30 billion in interest comes due Aug. 15. Overall, more than $500 billion matures in August.

The $90 billion in six-month Treasury bills maturing Aug. 4 pared losses after the comments. Obama administration officials will brief the public no earlier than after financial markets close tomorrow on priorities for paying the nation’s bills if the $14.3 trillion limit isn’t raised, a Democratic Party official said earlier.

“The announcement is reassuring, but there’s really no alternative to favoring the bondholders,” said Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies Group Inc., which as one of the 20 primary dealers is obligated to bid in Treasury sales. “The alternative would point to a default”

http://www.bloomberg.com/news/2011-07-28/u-s-contingency-plan-gives-bondholders-priority.html

[mawilson 2,133]

It's like a soap opera.

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It's like a soap opera.

[dalegg 143]

I feel like I've been in line waiting to ride a roller-coaster I'm really too scared to ride. I've been standing in line for 2 hours trying to decide how to get out of it, but couldn't come up with an excuse that wouldn't make me look like a coward, and now I'm actually sitting in the chair and the safety bar has actually come down, and pretty soon I'm going to need a change of underwear.

[Gary and Alla 3,694]

Big surprise. Anyone that believes this default scare tactic is a moron. It is the method of politicians that have nothing else to offer but to scare intellectually disabled people. So far they are trying to scare old people and people unable to think. Next they will start taking candy from babies and pushing wheelchair bound grandmothers into traffic.

They prove more and more that they should not be allowed anywhere near anything important, like healthcare.

It always gives me a chuckle when someone says we should do things that other countries do. Their legislatures are capable of actually doing things. Ours is not.

[Trumplestiltskin 5,791]

It makes you chuckle that your country is on the brink of a financial ruin?