Unintended Consequences

Yes, another post on default.  But a short one. 

The irony of the discussion regarding payment prioritization in the event of a default on 8/2 is that if we indeed honor our obligations to pay interest on the debt (as is universally acknowledged we would do) first as part of a prioritization scheme…. the effect will be to pay the Chinese and other foreign soverign debt-holders before we pay salaries for the troops (or Medicare, or air traffic controllers).  Can’t imagine that was the plan.

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