Will the government hit the debt ceiling on October 17? Maybe. Will this force the government to prioritize its payments? Probably not. Why not? Because of computers.
Every day, the government sends out at least 3 million checks. On some days, it is 5 million. It deposits money electronically in bank accounts. All of this is done by computer.
There is no time to re-program the computers.
What will happen on October 17? Will Obama call Secretary of the Treasury Lew and say: “Stop the presses?” Or will he do nothing?
I think he will do nothing. I think John Boehner will do nothing. I think Harry Reid will do nothing.
The checks will go out. The checks will not bounce. Life will go on.
Then what of the debt ceiling? What legal authority does it have? Not much.
If the checks go out, will Secretary Lew be fired? No. Will Obama be impeached? No. Will this go to the U.S. Supreme Court? Probably not. Even if it does, how soon will it take to go up through federal courts?
If the checks go out, then the debt ceiling is a dead issue.
If the government can run without either a Congressional budget or a “continuing resolution” — translation: kick the can — then the charade of the federal budget will be exposed for what it is: a Punch and Judy show, with foam rubber clubs.
The federal government is not going to go bankrupt yet. Not with the Federal Reserve there, ready to buy all the debt that China’s central bank and Japan’s won’t buy.
Somebody will have to back down by Halloween.