Treasury Secretary Janet Yellen Says U.S. Could Default as Soon as June 1

My first thought was, no way! No sane, honest, rational politician would ever allow the U.S. government to default on its debt due to an accounting technicality. My second thought was a more pessimistic: A remarkable number of U.S. senators and representatives today act in ways that seem neither sane, nor honest, nor rational to me. I hope those politicians don't carry the day.

Duplicate of: https://news.ycombinator.com/item?id=35778743

If going gets tough, there are many ways to avoid default.

(1) discharge petition - bill from committee to a vote.

(2) Fourteenth Amendment Constitution prevents willful default until SCOTUS says otherwise. Just keep issuing debt.

(3) High coupon and low principal. 10-year bond with $1 in principal and annual $100 coupon will increase debt ceiling almost 1000X.

(4) high denominations coin minting

No way they will let default happen. I still think the majority is rational.

That’s why this is like playing chicken with the economy. Each player assumes that the other player will act rationally and drop out first so they keep going.