1. Default scenarios:
With a deadlock over raising the debt ceiling looking more likely than a stalemate over funding the government to avert a shutdown, I’ve been looking for a definitive story on what exactly will happen if the ceiling isn’t raised.
Yes, we’ve read that the government is likely to continue to pay its debts to bondholders in order to avoid a default. That means that other checks for basic expenses, like payrolls, will have to be delayed until revenues roll in to cover them. But how exactly will that work?
Indeed, is there really any way that the government — which must have thousands of agencies and offices issuing checks every day — can control its outlays the way you or I might control our checkbooks when we’re in a pinch? Or is everything already programmed on systems that can maybe be turned on or off but can’t be tweaked to cover one check but not another? Who in the government is staying up at night working on that?
If the disbursements can, in fact, be controlled, who’s deciding what the priorities are and on what basis?
And how much is the daily or weekly shortfall likely to be? In other words, what percent of the government’s ongoing expenses, however the priorities are determined, will have to be deferred?