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peb
02-03-2011, 09:53 PM
Today Bernanke joined the chorus and raised the spectre of a US default on public debt if congress fails to raise the debt limit. This has been stated a lot the last few weeks, but I don't get it. Now, I am not advocating to not raise the debt limit of the US government, but I have a serious question. If congress did not raise the debt limit, why would it affect any of our current obligations? Would it not just have the affect of limiting further deficit spending, ie we can't go into more debt? Didn't this happen in the 90s during a standoff between Clinton and Gingrich and there was no spectre of default, it just shut down much of the government. Once again, not advocating it to be wise, but the fearmongering seems completely disingenuous. Am I right?

Sam F
02-04-2011, 06:01 PM
Today Bernanke joined the chorus and raised the spectre of a US default on public debt if congress fails to raise the debt limit. ... Didn't this happen in the 90s during a standoff between Clinton and Gingrich and there was no spectre of default, it just shut down much of the government. Once again, not advocating it to be wise, but the fearmongering seems completely disingenuous. Am I right?

As a family we refused to raise our debt limit - and we didn't default on any debts. The possibility never occurred to us.
So unless govt finances differ qualitatively from family finances - then you are right.