Oct. 10, 2013, Fairfax, VA—Americans for Limited Government President Nathan Mehrens today issued the following statement calling attention to a Moody’s report that the U.S. will not in fact default if the debt ceiling is reached, which states, “We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact”:
“This bombshell from Moody’s suggests that the Obama administration is bluffing about a default on the $16.7 trillion national debt should the borrowing limit be reached. Jack Lew has testified the opposite to a Senate committee that debt payments cannot be guaranteed and a default is likely if the debt ceiling is reached. Is he bluffing? The single question that Lew should be forced to answer is why the Treasury has not reformed its bill payment system that the Inspector General revealed in 2012 is on a first in, first out basis rather than prioritizing default-stopping interest payments on the debt in the event the borrowing limit is reached.
“After the 2011 debt ceiling confrontation, the fact this has not been fixed is beyond belief. It is gross mismanagement at best or a deliberate attempt to put the default gun to the head of the U.S. economy to prevent spending cuts.”
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