That would be an incorrect assumption. The treasury, by law, must pay what the Congress tells them to...and that would be to pay debt. Now I suppose Obama could try to stop that, but I seriously doubt our president would intentionally argue for default. Do you? Either way, Congress has the power of the purse. The treasury cannot cause default..
Its a correct assumption, because congress tried to tell them to do that last year, and was unable to speak (the bill failed), so as far as the treasury is concerned, no one is telling them to do anything. Until someone does, they will continue to pay bills as they always have, first gets paid first. I don't know where you are coming up with this assumption that congress has told them to pay debts first, they haven't, in fact, they specifically failed to do that.
You have it backwards. Investors want their debt paid back first and foremost of course, but they also want FISCAL RESPONSIBILITY from those they invest in, so that future payments are assured. It is NOT bankruptcy to scale back spending, sell off assets or defund programs that are no longer viable. It's the fiscally responsible thing to do when you're living beyond your means.
I agree with this, but this has also not happened. There have been no spending cuts, and there wont be any tomorrow. Not paying people you are lawfully obligated to pay, is not the same thing as spending cuts.
I agree, as long as you mean cut spending by way of passing laws to reduce spending, not cut spending by just not paying people. Its the difference of laying people off, vs employing them and not paying them.
A technical default will have all the same ramifications as a technical default.
In fact today we have already seen a massive amount of people trying to dump treasuries, so the effect is already happening
When government begins to reign in spending, you let us know about the effect on treasuries. Until then, we just keep piling on the debt while our "leaders" false incite panic by talking about default. THAT is what hurts interest rates and credit ratings, not fiscal responsibility.