The consequences of default are so awful, it's impossible to imagine Washington not raising the debt limit by March. And yet, here we are again, waiting and debating the un-debatable.
On December 31, the United States hit the debt ceiling. What, you didn't feel it? Well, no, you didn't, and neither did I. For that, we can thank "extraordinary measures," the extraordinarily vague term Washington uses to describe the various way the Treasury department can move around money to keep us from straight-up defaulting on our promised payments. But extraordinary only lasts so long. These measures buy us about six weeks -- basically until Valentine's Day. After six weeks, the United States government will be living hand to mouth on cash and daily revenue, and it's hours or days before ... DEFAULT.
What happens then? The only honest answer is: Nobody has any idea. It is the moment the Bipartisan Policy Center calls the X Date: The first day the U.S. government doesn't have the money it needs to pay all of its bills. The United States has never hit the X Date. Hopefully, we never will. But here's what we know about what would happen on day one in Default America.
On a typical day in late February 2013, the government can expect to
take in about $9 billion and spend about $15 billion. In Default
America, however, we wouldn't have the authority to spend that extra $6
billion. So those payments would simply go unpaid. Somebody in Washington would have to decide who gets the money they were promised and who doesn't. Every day. As long as the debt ceiling isn't raised. Basically, we'd default on 40 percent of our obligations, over and over again.