Gov’t Has Options, Even Without Debt Ceiling Increase

Even if lawmakers fail to pass a debt ceiling increase before the deadline, this would not necessarily mean default on U.S. Treasury debt.

From current tax revenue, the Treasury would easily be able to cover interest payments on debt, plus have an additional $180 billion to spend each month on the highest priority expenses. This would easily cover military personnel salaries as well as Social Security and Medicare.

So, even if such a temporary solution were to be employed, it would allow the government to avoid outright default. From the perspective of investors, this is certainly an important alternative.

2017-06-08T11:42:15+00:00 Government Policy|