What do you think the odds are for default?

[edhopper]

Not idle speculation, i am thinking of moving all my IRA into cash for the duration of this fiasco.

I really think it's 50/50 right now. To much propaganda from the right about how "it wouldn't be a bad thing."

[cali]

1. I think it's almost certain. just my opinion.

[jberryhill]

2. I'll bet 10,000 in US bonds it doesn't happen

[srican69]

3. depends..

Even cash is not safe...depending on how you define cash...if you hold the proceeds of sale of stocks and bonds in money market accounts then these may break the buck as they are backed by treasury bonds and bills

I am in the process of buying a house..and have moved money into savings and checking accounts that are fdic insured..

[econoclast]

4. Should be zero

Section four of the fourteenth amendment REQUIRES that the existing debt be paid. Reading the historical background of section four clearly indicates that the amendment was designed to (1) extinguish forever all debts incurred by the Confederacy ... Ie if you loaned money to the Confederacy you were OFFICIALLY never getting paid. Period. (2) Guaranteeing that Federal (Union) debt HAD TO BE PAID. There was a fear that Congressmen from former Confederate States might try some "default" chicanery as retribution against the Union. So they nipped that in the bud by Constitutionally GUARANTEEING the Federal debt.

So a default on the existing debt SHOULD be unconstitutional under section 4.

[alc]

5. what do you mean by "default"?

0% chance that we will fail to service external debt (standard US bonds).

5-10% chance we will fail to service internal debt (SS "special bonds&quot . SS trust fund admins will agree to this and probably get more "special bonds" so it won't even be a default (just payment with more bonds rather than US dollars). SS trust fund does not have standard bonds so even if they aren't paid on time it is a different class of default. Our monthly revenue is enough that we don't need to skip payments on SS but it is an option and we could take SS revenue to pay for other programs and stop SS benefit payments. This is only if repubs are sure to get all the blame and the dems really want to increase the pain to get things over.

75% chance we will rework some contracts so we can pay them late with a big bonus to avoid defaulting on those debts.

80% chance we will delay some new contract work from starting to avoid new debts we can't pay.

[econoclast]

6. Re US treasuries held by SSTF

These SHOULDN'T be a problem. Why? Because if the SSTF has a cash shortfall they redeem some of their existing bonds. The act of redemption REDUCES the debt by the amount redeemed .... Thereby making some room under the debt ceiling and allowing the Treasury to issue a like amount of NEW bonds to raise the cash to give to the SSTF.

This process is debt-neutral. ie it doesn't end up increasing the outstanding debt so it could be done without breaching the debt ceiling.