If we see no debt ceiling deal, the US will prioritise Treasuries

By Edward Harrison On Jul 28, 2011

The U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official.

The official requested anonymity because no announcement has been made. The Treasury has said about $90 billion in debt matures on Aug. 4 and more than $30 billion in interest comes due Aug. 15. Overall, more than $500 billion matures in August

–Bloomberg BusinessWeek

The Chinese will be pleased. Holders of other government liabilities, not so much. If it comes to this, expect it to be negative for economic growth.

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Government tax coercion versus fiat money liberty

Links 07/29/2011

1 Comment

Mike says 13 years ago

This was the only rational thing for them to say.

Similiarly, defence contractors will see money long before social security beneficiaries, veterans, hospitals, etc ever do. I wouldn’t be surprised to eventually hear that some hospitals will refuse to treat medicare-eligible patients (beyond what they absolutely must do) until there’s more certainty about payments. American hospitals treat the poor like dirt.

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