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To: HenryArmitage
there is no point to prioritizing payments. a Default on any payment will be seen the same way by market forces.

Not so. A "default" is defined as failing to pay any part of a pre-existing debt - i.e. interest or principal on a loan. That is very different from not paying full boat on some other governmental program that is merely a political promise.

Right now, the Treasury brings in well over $200 billion/month. The amount of interest payments and actual debt reduction (paying off bills, notes and bonds - even if there are many more issued that same month) pales in comparison to that number, so the only reason for a "default" (which would, after all, violate that terms of the 14th Amendment) would be a purposeful decision coming right from the top. No President can simply decide not to pay interest and principal because he would rather pay for some program that he likes better. It is a specific violation of the Constitution, and if he does it he should be impeached (and who cares what the Senate does - the impeachment itself would send the message that the Republicans can only be backed up so far).

I don't even know why the Rs want to pass a full faith and credit bill - Obama will veto it, but more importantly, IT ISN'T NECESSARY since the Constitution requires it.

7 posted on 10/09/2013 9:22:58 AM PDT by Ancesthntr ("The right to buy weapons is the right to be free." A. E. van Vogt)
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To: Ancesthntr

i don’t really care with the definition of ‘default’ is. Every financial person I have seen write about this agrees there is no difference between defaulting on an actual bond payment and defaulting on other payments the government must make. Markets will view it the same way.


10 posted on 10/09/2013 9:37:03 AM PDT by HenryArmitage (it was not meant that we should voyage far.)
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