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Derek Thompson

Derek Thompson - Derek Thompson is a senior editor at The Atlantic, where he oversees business coverage for the website.
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He is a visiting research fellow at the Committee for a Responsible Federal Budget at the New America Foundation. Derek has also written for Slate, BusinessWeek, and the Daily Beast. He has appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

The United States Will Never Default on Its Debt

By Derek Thompson
Jun 14 2010, 12:50 PM ET Comment

Bruce Bartlett finds some conservatives calling for the United States to default on our debt:

"De facto monetization of the debt could be inflationary, but default resulting from a lack of demand for Treasury bonds is not really possible. This does not mean that default is impossible, however, because there is always a danger that Congress will not raise the debt ceiling in a timely manner, meaning that the Treasury may not have sufficient cash to make interest payments or redeem maturing securities. If that happens, there would be a technical default."

It's worth exposing the insanity of conservatives calling for a default to U.S. debt, which would gut U.S. spending with vicious efficiency. But it's also worth pointing out that this will never ever happen. Republicans are making a purely political argument.

In 2006 zero Democrats voted for President Bush's fourth debt-limit increase. Were they voting for default? Nah, they were casting symbolic votes to express their displeasure over spending and tax cuts. Now Democrats are in power and they're raising the debt ceiling to make room for measures they find necessary. But no party in power is going to let the United States default on its debt.


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