Given the upcoming October 17 debt ceiling deadline, I thought you might be interested in reading a June 28, 2011 letter that then Secretary of the Treasury Timothy Geithner wrote to then U.S. Senator Jim DeMint. The overarching theme of the letter dealt with the idea of prioritizing payments should the debt ceiling not be raised. That issue was widely covered in the media at the time.
But there is something else in the letter that was not covered in the press back in 2011 and something that I have yet to see covered today as it relates to the dangers of not raising the debt ceiling. That something else has to do with how to pay off maturing U.S. government debt, not just interest payments, in the event the debt ceiling is not raised. The discussion of maturing debt is found in the two paragraphs beginning with “’Prioritization’ also fails to account for how payments of principal would be made . . .”
The full letter can be read at Treasury.gov by clicking here.
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