Everyone talking about the
The gist: There is NO obvious way to simply "prioritize" payments. The revenue is too lumpy. A default is a real possibility. And there's no alternative to raising the debt ceiling.
GREAT stuff.
(1) Treasury makes huge regular payments at the beginning of the month -- like for Social Security and federal retirement benefits.
— Tony Fratto (@TonyFratto) January 16, 2013
(2) While tax revenues tend to come in during the middle of the month. See why "prioritizing" won't work?
— Tony Fratto (@TonyFratto) January 16, 2013
(3) To fund gov at the lowest cost &pay obligations on time. Treasury uses short-term financing and small cash management bills.
— Tony Fratto (@TonyFratto) January 16, 2013
(4) The idea that Treasury *could* prioritize -- even if desired -- is fanciful & misunderstands federal financing requirements.
— Tony Fratto (@TonyFratto) January 16, 2013
(5) We can't think of Treasury meeting obligations on a *monthly* basis; we have to think of cash management needs on a *daily* basis.
— Tony Fratto (@TonyFratto) January 16, 2013
(6) Because the revenue needs and obligations of an enormous government don't match up nicely for us -- they're very "spikey" & mismatched.
— Tony Fratto (@TonyFratto) January 16, 2013
(7) Some think Treasury can somehow navigate through this, but Treasury can't tell SS beneficiaries to wait until the 3rd week of the month.
— Tony Fratto (@TonyFratto) January 16, 2013
(8) Some want to believe Admin is bluffing or being political by saying "default".To me, actual default is not just possible but likely.
— Tony Fratto (@TonyFratto) January 16, 2013
(9) I don't know if I can make it any more clear: there is no rational alternative to raising the debt ceiling, & preferably early.
— Tony Fratto (@TonyFratto) January 16, 2013