Question regarding Debt Ceiling

[redstatebluegirl]

Do any of you believe the rich people who back the Republicans, and Democrats for that matter will risk their wealth by allowing the country to default on our obligations on October 18th? I cannot believe they would risk their fortunes in what could be an international financial meltdown to make a point.

I may be wrong, and am open to being educated on this subject.

[dixiegrrrrl]

1. A refusal to raise the debt ceiling is not a default.

Two different things, which get confused a lot.

A default would be the refusal to pay the interest and principal of our current debt (or roll over the latter) when it came due.

So far the national budget has been addressed by:
1. constantly rolling over the current debt
2. raising the debt ceiling in order borrow more money ( take on more debt)
instead of
paying what we owe once and for all.

Put in simpler terms:

You have a credit card with a 5,000 limit.
You owe 5,000 on the card, and have been making payments of principal and interest on the debt.
If you ask the credit card bank to raise your limit to beyond 5,000, that is the same as raising the debt celing.
You have not defaulted on your payments, you have merely increased the amount you can "spend" using the card.
( which would be kinda dumb, and put you further in debt)

A default comes when you have more debt than income, and you cannot pay the credit card bill.