Government would continue to pay interest and principal on debt even if debt limit not raised

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    Oct 09, 2013 6:58 PM GMT
    As I mentioned in another topic. There's plenty of money coming in for the government to continue to service the debt.

    Moody's agrees with me.

    We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.

    http://www.washingtonpost.com/blogs/post-politics-live/liveblog/live-updates-the-shutdown-4/?hpid=z2#c1e3ada3-dc00-41d8-92cb-327c5c814d82
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    Oct 10, 2013 12:06 AM GMT
    It will be interesting to see how this plays out. Today, Fidelity sold all of its US debt maturing mid-month. PIMCO also took action limiting its exposure.