While for some reason no one can exactly nail the date now, the word on the street is that if the United States government doesn’t come to some agreement to raise its self-imposed debt ceiling by October 17th, there could be an actual default for the first time. It works just like your own personal credit. You have to make a minimum payment on your debt by a certain date. If you don’t, you are in default. This can lead to higher interest rates and an inability to borrow money in the future. It is no different for the United States of America as an entity.
While the government has flirted with this before, they never have actually gone over the line and actually allowed the United States to miss a payment. This would negatively affect the credit rating of the nation and could have grave economic implications.
Then again, it might be the best damn thing that ever happened in recent times.
Think about it. The problem in Washington is simple. They keep voraciously spending money they don’t have over and over again, despite an ever-deepening national debt. To keep up with this spending, they borrow money based on their good name. They then lather, rinse, and repeat.
The first thing you do to a hemorrhaging wound is what? Tourniquet. Stop the bleeding. The only way this government will ever stop spending more money than it is taking in is if they simply lost the ability to do so.
Imagine that. If the government suddenly got turned down for a loan (a fate that millions upon millions of American citizens have privately endured over the last decade especially), they would be forced to live and operate within their means. And don’t let either political party’s theatrics persuade you that they cannot do that. The United States government takes in billions upon billions of dollars, and they can operate just fine and dandy on what they pilfer from the American people. It’s just, they don’t really want to. They don’t want that facet turned off. They like it on, they like it hemorrhaging, and the more blood lost, the better.
Having said all that, there is zero chance that will happen. All of this political pandering is romantic and all, but make no mistake. Both sides of the aisle are 100% aware of what a default would mean. And they are not thinking about the economy. They are thinking about their own unlimited credit line.
Imagine if you had a credit card that you didn’t have to pay for. You can use it all you want and you don’t really have to answer to anyone for why you charged what. Then, you get a notice that the credit line is almost full. But, fortunately, all you have to do is say “Okay, increase my line” and then get right back to spending out of control with no repercussions to worry about.
Believe the experts at Common Sense Conspiracy. Congress will be saying “Okay” just in the nick of time. And then they will act as if they have moved a mountain, turned water into wine, or at the very least, done a stinking great job in all of this. Then, the next morning, after they get through patting each other on the back…they spend some more.
Lather, rinse, repeat.