President Barack Obama said that if the debt ceiling was not raised, the United States would default on its debts. That does not make sense.
Every week, the federal government receives about $50 billion in taxes, customs, fees and other sources that the secretary of the Treasury can immediately use to pay authorized expenses. If the authorized expenses exceed the cash in the Treasury, the secretary of the Treasury would then decide which authorized expenditures to pay on time and which to defer.
The payments on the national debt are about $7 billion each week. Since we agree that defaulting on our debt payments would be one of the worst choices possible, why would the secretary of the Treasury decide to pay something else first? Defaulting on the debt would be both irresponsible and unnecessary.
Hopefully, our president has been bluffing for political leverage by promising to default on our sovereign debt if not given more borrowing power. Surely, he is not depraved enough to actually do it. Is he?
