Debt Limit Myth vs Fact

Treasury has a good document clarifying things about the debt limit.  I think the document is apolitical and does layout the facts correctly.

Debt Limit Myth Vs Fact

I also found a poll by the Pew Research Center which had pretty amazing findings. It shows that slightly more people think the risks from raising the debt limit are higher than that not raising it.

Pew Poll on Debt Limit

Although I share the concern about the debt and deficits, I just cannot fathom how the risks of default right now(by not increasing debt limit) can be lower. The only way I can make sense of this poll is that people did not understand the question or there are many people who are so against possibility of paying higher taxes in the future that they would prefer the govt default or just cut spending drastically in an arbitrary fashion.

Update: Just a few minutes ago, Moody’s came out with a note saying they are putting US AAA credit rating on downgrade watch as they think there is a very small but rising risk of a short lived default. Moody’s thinks there is a small chance that the debt limit may not be raised on time. In reaction to this news the S&P futures are trading about 1% lower from where the market closed.

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