With an Aug 2 deadline, what happens on Aug 3?

July 29, 2011

Many observers didn’t think we’d actually get to this point. With the August 2 deadline set by the Treasury Department just days away, and with no final agreement in sight, what will happen on August 3 if the debt ceiling is not raised and the U.S. can no longer meet all of its outstanding financial obligations? Last month, the Bipartisan Policy Center analyzed this very question. For the remainder of August, federal spending would have to be cut by nearly 44 percent. Treasury gets to decide what bills gets paid and what don’t get paid. Here is an example of what gets paid and what doesn’t:

[I]nterest on our existing debt, Medicare, Medicaid, Social Security, unemployment insurance and defense contracts [get paid]. Without cutting from these items, there would be no money to fund entire U.S. departments, such as Justice, Labor, and Commerce. There would also not be funds to pay for veterans’ benefits, IRS refunds, military active duty pay, federal salaries and benefits, special education programs, Pell Grants for college students or food and rent payments for the poor.

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24 Responses to With an Aug 2 deadline, what happens on Aug 3?

  1. Hopper0052 says:

    I really hope we go past the dead line because I think this is a total made up crisis by the Obama administration
    I’m willing to go for broke because if we lose our AAA rating we will pay and if we pass the credit limit up more it is still going to cost us even more!

  2. Hopper0052 says:

    I really hope we go past the dead line because I think this is a total made up crisis by the Obama administration
    I’m willing to go for broke because if we lose our AAA rating we will pay and if we pass the credit limit up more it is still going to cost us even more!

  3. Hopper0052 says:

    I really hope we go past the dead line because I think this is a total made up crisis by the Obama administration
    I’m willing to go for broke because if we lose our AAA rating we will pay and if we pass the credit limit up more it is still going to cost us even more!

  4. netbacker says:

    A government that issues its own currency and owes its debt in that currency cannot go broke. Why will we default? #debtceiling

    • CelticChik says:

      Because the more money we continue to print de-values the currency already in the market. So then a loaf a bread costs $300, not $3.00 – and the cost for everything goes through the roof. When your personal budget is maxed out and you don’t have options to bring in additional income or open new credit cards, what do you do? You cut your spending.

  5. netbacker says:

    A government that issues its own currency and owes its debt in that currency cannot go broke. Why will we default? #debtceiling

    • CelticChik says:

      Because the more money we continue to print de-values the currency already in the market. So then a loaf a bread costs $300, not $3.00 – and the cost for everything goes through the roof. When your personal budget is maxed out and you don’t have options to bring in additional income or open new credit cards, what do you do? You cut your spending.

  6. netbacker says:

    A government that issues its own currency and owes its debt in that currency cannot go broke. Why will we default? #debtceiling

    • CelticChik says:

      Because the more money we continue to print de-values the currency already in the market. So then a loaf a bread costs $300, not $3.00 – and the cost for everything goes through the roof. When your personal budget is maxed out and you don’t have options to bring in additional income or open new credit cards, what do you do? You cut your spending.

  7. CelticChik says:

    If Congress and the President would quit spending money we don’t have (i.e. ObamaCare and all the other social welfare programs) we wouldn’t be in this position to begin with. If they can’t agree on where to make the cuts, then they should cut everything by 10% across the board.

    • Web-walker says:

      And don’t forget the 3 (or more?) wars which continue unabated, costing US taxpayers billions of dollars a MONTH. Everyone like to wave the flag and spout patriotic mumbo-jumbo, but the bottom line is that they are NOT serving the good of US citizens. They were created by bureaucrats with extremely selfish purposes and are gaping holes in the side of an already sinking ship.

  8. CelticChik says:

    If Congress and the President would quit spending money we don’t have (i.e. ObamaCare and all the other social welfare programs) we wouldn’t be in this position to begin with. If they can’t agree on where to make the cuts, then they should cut everything by 10% across the board.

    • Web-walker says:

      And don’t forget the 3 (or more?) wars which continue unabated, costing US taxpayers billions of dollars a MONTH. Everyone like to wave the flag and spout patriotic mumbo-jumbo, but the bottom line is that they are NOT serving the good of US citizens. They were created by bureaucrats with extremely selfish purposes and are gaping holes in the side of an already sinking ship.

  9. CelticChik says:

    If Congress and the President would quit spending money we don’t have (i.e. ObamaCare and all the other social welfare programs) we wouldn’t be in this position to begin with. If they can’t agree on where to make the cuts, then they should cut everything by 10% across the board.

    • Web-walker says:

      And don’t forget the 3 (or more?) wars which continue unabated, costing US taxpayers billions of dollars a MONTH. Everyone like to wave the flag and spout patriotic mumbo-jumbo, but the bottom line is that they are NOT serving the good of US citizens. They were created by bureaucrats with extremely selfish purposes and are gaping holes in the side of an already sinking ship.

  10. conservative101 says:

    I can’t believe the US government has only $100 b. on hand. Last time, Timmy Geithner produced $500 b. with a sleight of hand. Can’t he perform the same trick this time?

  11. conservative101 says:

    I can’t believe the US government has only $100 b. on hand. Last time, Timmy Geithner produced $500 b. with a sleight of hand. Can’t he perform the same trick this time?

  12. conservative101 says:

    I can’t believe the US government has only $100 b. on hand. Last time, Timmy Geithner produced $500 b. with a sleight of hand. Can’t he perform the same trick this time?

  13. Warty says:

    would anyone miss HUD?, or the Dept. of labor, energy, commerce, NEA, NEH, SBA except the parasites, do not raise the debt limit
    and have them start cutting. The less government workers you have the less people to continue to spend on non-essentials.

  14. Warty says:

    would anyone miss HUD?, or the Dept. of labor, energy, commerce, NEA, NEH, SBA except the parasites, do not raise the debt limit
    and have them start cutting. The less government workers you have the less people to continue to spend on non-essentials.

  15. Warty says:

    would anyone miss HUD?, or the Dept. of labor, energy, commerce, NEA, NEH, SBA except the parasites, do not raise the debt limit
    and have them start cutting. The less government workers you have the less people to continue to spend on non-essentials.

  16. Charles says:

    How long could we do without Justice, Labor, Commerce, etc., a day, acentury, a … ?
    Proudcon.

  17. Charles says:

    How long could we do without Justice, Labor, Commerce, etc., a day, acentury, a … ?
    Proudcon.

  18. Charles says:

    How long could we do without Justice, Labor, Commerce, etc., a day, acentury, a … ?
    Proudcon.

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