Turns out all that talk from President Obama about imminent default was just pure political bluster. Surprise, surprise.
I guess this means ABC News can pull the plug on its U.S. Debt Default Countdown Clock now.
While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.
In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.
Keep in mind there are a couple of ways for Obama to avoid default, in the event the debt ceiling isn’t raised. One way would be for him to simply pay the $29 billion or so in debt service for August first, out of the anticipated $175-$200 billion in revenues next month to the federal government . That would be the rational, constitutionally-sanctioned thing for him to do as President. The other way would be for him to simply blow past the debt ceiling unilaterally and dare Congress to stop him – because the 14th Amendment says he can do that, or something.
If he does the latter, we will know for sure we are living under de facto dictatorship.
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