« | »

Shocker: The US Won’t Default On Aug 2nd!

Reuters lays the groundwork for the embarrassing absence of a financial Apocalypse on August 3rd:

Is default deadline truly Aug 2? Analysts say no

By Rachelle Younglai | Reuters
July 27, 2011

WASHINGTON (Reuters) – Will the sky fall on August 2 if the U.S. Congress fails to raise the debt ceiling?

Not likely, according to analysts, who say that even without the ability to borrow more money, the government could avoid a devastating default for another week or so. That raises the question of how urgently action is needed to increase the nation’s borrowing limit.

For weeks, President Barack Obama and Treasury Secretary Timothy Geithner have stressed that the U.S. Treasury will run out of room to borrow funds next Tuesday and have warned of dire consequences if Congress does not raise the nation’s $14.3 trillion debt ceiling in time.

But Treasury officials have never said when the government will run out of cash to pay the nation’s bills —

Really? We could have sworn we have heard Mr. Geithner and other say they weren’t going to have enough money to pay our debts after August 2nd countless times. In fact, that is all they have been saying for weeks.

[A]nd the consensus among Wall Street analysts is that the cash won’t run out until about two weeks after the August debt-ceiling drop-dead date.

But don’t worry, two weeks from now, there will be another absolute "drop dead date."

"The first risk of a legitimate default is August 15," said Ward McCarthy, chief financial economist and managing director at Jefferies & Co. "Cash is not going to be an immediate problem. The debt ceiling space is not going to be an immediate problem."

McCarthy and other Wall Street analysts predict that the Treasury will have enough cash to meet its early-to-mid August obligations, including $23 billion in Social Security payments to the elderly and disabled on August 3.

That view lends credence to claims that some Republicans have been making for days now that the U.S. government will be able to keep functioning and paying its bills even if there is no deal by August 2

The hell you say. But this does raise the question we have asked before. If the administration and their minions in the news media are willing to lie to us about this, what else are they lying about?

Wrightson and Jefferies expect the United States would start defaulting on its obligations on August 15, the date the government must pay out $41 billion, including around $30 billion in interest on U.S. debt

Note that they are talking about the US "defaulting on its obligations." That is vastly different from the US defaulting on its debt. – Which is what is meant the financial markets mean by defaulting.

But the administration and their media minions have been careful to blur the distinction.

A Treasury spokesperson on Tuesday had no comment.

What a surprise, huh?

Analysts do not expect the credit rating agencies to downgrade U.S. debt if Congress does not raise the limit by August 2 and the government is still able to pay its bills.

That could potentially give a divided Congress more time to craft a plan to cut spending and raise the limit on how much Treasury can borrow…

More shocking revelations. Buried near the bottom of this long article.

Any sign from the administration that Congress has more time to negotiate a budget deal could undermine Geithner’s credibility.

"Could"? Mr. Geithner is ‘the boy who cried wolf’ — on steroids.

The U.S. Treasury has shifted the forecast of when it would initially bump up against the borrowing cap three times and once pushed back its drop-dead estimate – now August 2 — of when it would exhaust all special measures that let it keep borrowing…

And they will move it again. And our make believe news media will be only to happy to go along with the next ‘absolute, no kidding, drop dead’ deadline.

This article was posted by Steve Gilbert on Wednesday, July 27th, 2011. Comments are currently closed.

One Response to “Shocker: The US Won’t Default On Aug 2nd!”

  1. Undermine Geitner’s credibility? Seriously? How Is it possible to undermine that which does not exist?
    Geitner hasn’t had any credibility since the day he sat in congress and claimed that he didn’t pay his taxes because he couldn’t “work” turbotax.( and that supposes that he had credibility before) Geitner spends too much time giving himself prostate exams (thumb up arse) to carry credibility with anyone who has been paying attention for the last 2+years. At least Nero played the fiddle while Rome burned. Geitner just keeps thumbing his prostate and making excuses. Must be the new liberal S.O.P.




« Front Page | To Top
« | »