I’d like to explain why I think “payment prioritization” proposals are bad ideas, why and how Congressional Republicans should support a debt limit increase, and why they need to be smart about how they push for spending cuts.

Payment prioritization proposals

As background, in my last post I explained the difference between default and technical default:

Missing or delaying a debt payment on Treasury debt is called default. Missing or delaying other government payments is sometimes called technical default or defaulting on our obligations. While default sounds like technical default, they’re quite different. The first directly threatens the full faith and credit of the U.S. government as a borrower and is a direct attack on our government’s credit rating and borrowing costs. The second is terribly irresponsible, and the government would be sued by whoever’s payments were delayed, but it’s a full step less egregious than defaulting on Treasuries.

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