Phineas:
Daring to contradict The One’s attempts to beat the House into submission by causing a panic? Moody’s is so going to get audited:
In a memo being circulated on Capitol Hill Wednesday, Moody’s Investors Service offers “answers to frequently asked questions” about the government shutdown, now in its second week, and the federal debt limit. President Obama has said that, unless Congress acts to raise the $16.7 trillion limit by next Thursday, the nation will be at risk of default.
Not so, Moody’s says in the memo dated Oct. 7.
” We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.
(…)
The Moody’s memo goes on to argue that the situation is actually much less serious than in 2011, when the nation last faced a pitched battle over the debt limit.
The bolded portion is key: the United States Government takes in enough revenue to meet its financial obligations, and the Treasury Secretary has the authority to prioritize payments on the debt. It just stops the government from borrowing to cover its spending. As Dan Mitchell explains:
It easy….Obamas lips were moving.