Wrenching Decisions Loom If Debt Ceiling Isn't Raised

If Washington doesn’t manage to raise the debt ceiling by Aug. 2, Tim Geithner’s going to have some angry people on his hands. That’s the date the Bipartisan Policy Center predicts the government will run out of money, leaving the US to pay its bills with incoming tax money. In August, that amounts to $172.4 billion in revenue to pay $306.7 billion in obligations, meaning someone—be it seniors, soldiers, the unemployed, or bondholders—will be getting shafted, the Washington Post observes.

“You can move the chess pieces around all you want,” says the former Treasury official who ran the analysis. “You’re going to lose.” Paying for Social Security, Medicare, Medicaid, defense contracts, and unemployment, for example, would leave the government unable to pay courts, police, soldiers, veterans, and so on. At the same time, Treasury must pay bondholders, or its credit rating will drop—making future borrowing even costlier. (More debt ceiling stories.)