I've mentioned in many previous posts that government debt is really not like private debt. Instead government bonds are more like another type of currency or money. The key difference between government bonds and paper money is that bonds pay interest and money doesn't. That's about it. But it's a key point because government bonds, … Continue reading More on What Happens If Debt Ceiling Isn’t Raised
Day: July 27, 2011
What Happens If Government Debt Ceiling Isn’t Raised? 2 Things That Might, 1 That Will, and 1 That Won’t
Anybody who tells you they know exactly what's going to happen if Congress doesn't raise the government debt ceiling before next week is just making it up. Reality is we don't know for sure. As Brad Delong notes (and Krugman and Nick Rowe), economists don't even have nicely worked-out theoretical models of what happens if … Continue reading What Happens If Government Debt Ceiling Isn’t Raised? 2 Things That Might, 1 That Will, and 1 That Won’t
EconProph 