Borrowing limit increase of US government
Something about finance every day for today:
About raising federal government debt ceiling and different aspects’ reaction:
Moody’s says US should retain top credit rating
http://finance.yahoo.com/news/Moodys-says-US-should-retain-apf-2415698832.html?x=0
Moody’s Investors Service said late Friday that the United States should be able to keep its triple-A credit rating as long as Washington works out a deal that lets it continue to pay bondholders.
The credit rating agency said it thinks that even if the nation’s $14.3 trillion borrowing limit isn’t raised by Tuesday’s deadline, the government would give priority to making interest payments on its debt and thereby avoid a default.
Moody’s had warned July 13 that the country’s credit rating was in danger of being downgraded because of the stalemate in Congress over raising the debt limit.
Here is a blog I found that talks about Default, and it has an interesting charts showing how the borrowing limit has increased continuously in the recent history.
The U.S. Treasury will not default
I am in favor of an increase in the debt ceiling and I believe there is a high probability that a debt ceiling limit extension will be enacted, but that really is not the issue. If it does not pass, the Treasury would have to take other measures including prioritizing expenditures such as principal and interest on the debt, Social Security payments and so on.In my view, failing to make expenditures promised by government agencies would be bad.
However, as this chart shows, the debt ceiling really is a bit of a joke. It’s not a ceiling in any normal sense of the word, just a technicality. Both Republicans and Democrats have become addicted to debt and it was just assumed the debt ceiling would get passed automatically
U.S. Treasury reiterates August 2 debt limit warning
http://www.reuters.com/article/2011/07/27/us-usa-debt-deadline-idUSTRE76Q5KL20110727
The Treasury on Wednesday reiterated its warning that it cannot guarantee payment of all the government’s bills after August 2 without an increase in the federal borrowing limit.
http://fxtrade.oanda.com/analysis/infographics/us-debt-ceiling-crisis#host
Chloe Sha 