Thursday, July 14, 2011

If the Worst Happens

Zachary Goldfarb has a piece in the Post discussing the complexities the Treasury will face if there's no debt ceiling deal by August 2. While, as Republicans delight in saying, there's enough tax money coming in to handle the interest on the national debt and some other stuff, the decision making rapidly gets tricky.  (There's a chart in print paper I don't see online, but the Post does have a separate "game" where you can figure out which bills you pay and which you don't.)  The complexity comes in when you move past the neat tables of expenses for various items and look at the day to day receipts and payables coming due. 

For example, one day in:
On Aug. 3, the Treasury is set to receive about $12 billion in tax revenue — mainly from people paying their taxes late — and is slated to spend $32 billion, including sending out more than 25 million Social Security and disability checks at a cost of $23 billion, according to Powell’s analysis.
Obama could decide to pay half of the Social Security checks and ignore other bills coming due that day, which include $500 million in federal salaries and $1.4 billion in payments to defense contractors.
We really don't want to go there.

1 comment:

  1. Hmm... I know the electric company, phone company, mortgage banker, gas station, grocery store and others would get rather unhappy with me if I tried this stunt. I don't know how they should fix it but it is looking rather broken.

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