Raise the Debt Limit? That's the WRONG question.

[Liability]

Worth repeating:

The BPC study found that the United States is likely to hit the debt limit sometime between August 2 and August 9. “It’s a 44 percent overnight cut in federal spending” if Congress hits the debt limit, Powell said. The BPC study projects there will be $172 billion in federal revenues in August and $307 billion in authorized expenditures. That means there's enough money to pay for, say, interest on the debt ($29 billion), Social Security ($49.2 billion), Medicare and Medicaid ($50 billion), active duty troop pay ($2.9 billion), veterans affairs programs ($2.9 billion).

That leaves you with about $39 billion to fund (or not fund) the following:

Defense vendors ($31.7 billion)

IRS refunds ($3.9 billion)

Food stamps and welfare ($9.3 billion)

Unemployment insurance benefits ($12.8 billion)

Department of Education ($20.2 billion)

Housing and Urban Development ($6.7 billion)

Other spending, such as Departmens of Justice, Labor, Commerce, EPA, HHS ($73.6 billion)

The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn't.
Powell notes, however, that Congress made sure during a budget standoff in 1996 that Social Security recipients would not be affected. “In 1996, during an impasse, [Treasury Secretary] Bob Rubin gave the Congress notice that he would be unable to pay the March ’96 Social Security payment. Congress immediately—and I mean, immediately—passed a law that allowed the Treasury to borrow money specifically for that purpose and exempted that borrowing from the debt limit.” While the U.S. wouldn't default on its debt, Powell argues that failure to raise the debt ceiling could spook the credit markets and lead to higher rates. But that's a risk many Republicans are willing to take if the alternative is accepting a rotten deal.

“I understand where some of the Republicans are coming from," Powell told me. "They do actually think on our current path a crisis is inevitable. In five years it’s going to be worse, so let’s push this thing really hard, and if we have to have it now, let’s have it now. To which my response is: There's every reason to think we're still working on this and there's plenty of time to fix this."

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-- Bipartisan Policy Center: U.S. Won't Default on Debt If Congress Fails to Raise Debt Ceiling | The Weekly Standard

From your article:

“It's also clear that there's nowhere near enough money to pay all of your legally mandated obligations, so one might say you’re defaulting on your non-debt obligations. But again I don’t want to get into the labeling contests,” said Powell who served as Under Secretary of the Treasury for Finance under George H.W. Bush.

So how exactly do you define "Default?"

Note that I cited the article despite the silly claims of guys like Powell.

It is NOT "clear" that there's "nowhere near enough money to pay all of [of the] legally mandated obligations." What IS clear is that there is enough to pay the interest and principle od the debt as it becomes due (which is what I have said and many others have said for some time) and THEN enough to divvy up to attend to OTHER obligations. They may have to get dramatically scaled back. Ok. Good. SOME of the shit we pay for now ought to hit the chopping block entirely. Other parts may need to go on getting funded. Also ok by me. Tough calls all around. Too bad.

We brought it all down on ourselves. No whining allowed now that we have to deal with the fucking MESS. But guess what. We either deal with it now (hard as it is) OR we deal with it later when it might be effectively impossible.

Gee. What should we do?

 

[Liability]

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edit: To address your parting question: Yes this one we need to address tomorrow. If we default, we won't have an economy left to worry about.

Illogical.

THAT'S EXACTLY WHY we need to deal with it immediately. Not tomorrow. Today. NOW.

We've put it all off to "tomorrow" for FAR too long. And as many of us have realized, technically, "tomorrow" never arrives.