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Tuesday, January 8, 2013

What Happens If Republicans Breach the Debt Ceiling?

Posted by on Tue, Jan 8, 2013 at 1:01 PM

Ezra Klein at The Washington Post says the Bipartisan Policy Center is predicting that the "debt ceiling doomsday" will happen sometime in the second half of February. From there, unless congressional Republicans play nice, it will get ugly:

Imagine we hit the debt ceiling Feb. 15. The BPC’s analysis suggests that federal spending over the next month will be about $450 billion. Federal revenues will be nearer to $277 billion. That means that the government will have to default on about 40 percent of its obligations.

The choices it will face quickly become stark. It can cover interest on the debt, Social Security, Medicare, Medicaid, defense spending, education, food stamps and other low-income transfers, and a handful of other programs, but doing all that will mean defaulting on everything — really, everything — else. The FBI will shut down. The people responsible for tracking down loose nukes will lose their jobs. The prisons won’t operate. The biomedical researchers won’t be funded. The court system will close its doors. The tax refunds won’t go out. The Federal Aviation Administration will go offline. The parks will close. Food safety inspections will cease.

It only gets worse from there. This should be your daily dose of alarmist reading, just so you know how high the debt ceiling stakes could go: Go read the whole thing.


Comments (12) RSS

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Former Lurker 1
If it shuts down the FBI and CIA then let's go over that debt ceiling cliff (??)...
Posted by Former Lurker on January 8, 2013 at 1:10 PM · Report this
tainte 2
eh, who cares.
Posted by tainte on January 8, 2013 at 1:13 PM · Report this
Max Solomon 3
oh noez, don't cut defense spending! we'll be sitting ducks!
Posted by Max Solomon on January 8, 2013 at 1:20 PM · Report this
Ballard Pimp 4
How long can we last if we stop all defense spending? Give the guys a month's furlough.
Posted by Ballard Pimp on January 8, 2013 at 1:39 PM · Report this
Urgutha Forka 5
The republicans will agree to raise the debt ceiling at the last minute. Up until then, everyone will be wailing about how the sky is falling.

Same as they always do.

This stuff is so predictable, it's boring.
Posted by Urgutha Forka on January 8, 2013 at 1:42 PM · Report this
Last minute deal, with the Trillion Dollar Coin in Obama's back pocket just in case. Zzzzzzz.
Posted by tiktok on January 8, 2013 at 1:46 PM · Report this
Will in Seattle 7
Just start laying off Red District military subcontractors and the same for the Three Letter Agencies.

They'll cave faster than Junebugs.
Posted by Will in Seattle on January 8, 2013 at 1:46 PM · Report this
Sounds like it will shut down a whole bunch of programs/agencies for which there is no federal authority. Sounds good to me.
Posted by dean.fuller on January 8, 2013 at 3:07 PM · Report this
That great voice of reason (not!), Ramesh Ponnuru has written an article over at Bloomberg as to why the debt ceiling fight is a good thing. If you need a reason to think it's a bad thing, there you go!

By the way, if you do go read the article, or try to, there's a great comment there by some Brooklyn_Reader fellow which could use a few "likes."
Posted by Brooklyn Reader on January 8, 2013 at 3:48 PM · Report this
Republicans will wait until the last minute because that is the best way to prevent any bold new policy issues from emerging between crises.
Posted by Rain Monkey on January 8, 2013 at 5:52 PM · Report this
Dr_Awesome 11
@9- Don't see any comments. Does one have to be a Bloomberg suscriber?
Posted by Dr_Awesome on January 8, 2013 at 7:44 PM · Report this
Theodore Gorath 13
And the seasons, they go round and round...

#5 is correct: piss, moan, piss, moan, last minute deal to raise debt ceiling, repeat.
Posted by Theodore Gorath on January 9, 2013 at 6:13 AM · Report this

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