Answers to Your Debt Limit and Default Questions

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  • Q. Couldn’t the Government Simply Print More Money?
  • Q. If They Can’t Print More Money, What Else Could Treasury Do?
  • Q. Would Delaying Payments Avoid a Default?
  • Q. Could President Obama Ignore the Debt Limit?
  • Q. What do Global Investors Thinking, Are they Panicking?
  • Q. What Would Be the Economic Impact?
  • Q. Is the Debacle About an Out-Of-Control Budget Deficit?
  • Q. Why is it Potentially Catastrophic for the Government to Default?
  • Debt Ceiling Dilemma
  • Q. What is the Debt Ceiling?
  • Q. How Close Is the Nation to the Limit?
  • Q. What Will Happen After Oct. 17?
  • Q. When the Government Runs Out of Cash Will It Default?

Q. Would Delaying Payments Avoid a Default?

A. It depends. One problem is that the government would likely have to pay higher interest on new debt. The government, on Oct. 24, must redeem $93 billion in short-term debt. Yet given the risk of a default, investors would demand higher rates on new U.S. debt. Short of cash, the government might be unable to pay off its maturing debt, thus resulting in a default.

(Photo: Neil Overy/Getty Images)

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