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Monday, Oct 7
Moody's: No need to default if debt ceiling not raised
- "There is no direct connection between the debt limit and a default," says Moody's Steven Hess, believing the government would continue to service its borrowings even if the debt ceiling isn't raised by the Oct. 17 deadline. The debt limit, he notes, restricts government expenditures to the amount of incoming revenues - it does not prohibit servicing existing debt or issuing new paper to replace maturing debt.
- Interest could be a different story, and technically is an expense the Treasury could decide not to pay. Even still, the first interest payment isn't due until October 31, and it's a relatively small $5.9B. Mid-November's payment is $30.9B.