I wrote on this subject many times before but I have to emphasize it again. Any, I repeat ANY suggestion that not raising the debt ceiling will cause a default in the “full faith and credit of the US” is false. It is perpetrated by scaremongering corrupt politicians and is magnified by stupid and ignorant politicians and media people. I will let you choose which one is which.

For instance, which category would you like your president to fall in?

Let me explain it again:

The interest payment on the existing debt is only slightly more than 10% of the regular treasury revenues, so there is no need for NEW debt in order to pay interest. Principle repayment on existing debt can be financed by issuing NEW debt because this will not change the CEILING. You raise only as much as you pay off.

The only problem will be in day-to-day operations of the government. Some payments to vendors, some transfer payments, some contractors of the government will not be paid on time. This is harsh, no two ways about it, but it is NOT a default on the “full faith and credit.”

Any suggestion that the president can choose to not pay interest but pay vendors is ludicrous. It does not meet the test of logic and does not meet the words of the 14th Amendment to the Constitution. So why are all these people saying that it is a possibility time and time again? Because they are either criminals who are shouting “fire” in a crowded theater, or they are criminally stupid and ignorant. Either way, it is contemptible.

How do I know that I am right beyond doubt? Look at the markets. Do you think that the $16 Trillion market for U.S. government debt would be sanguine about it if there was even a hint of a risk? Bill Gross of PIMCO and Lawrence Fink of Blackrock both said the other day on Bloomberg that there is “zero chance” of government default. These two gentlemen between them control trillions of U.S. debt instruments. They would never use the word ZERO on anything. Yet they both did separately in this case.

Why? Because it is ZERO.

Shame on all the scaremongers and their idiot followers.