Sometime in early August, Uncle Sam’s checking account is going to get pretty messy if Congress and the President can’t arrive at some sort of meaningful solution. Is this a stupid, manufactured disaster? Probably so. Will that change the facts on the ground if the government is in default? Not at all.
In the middle of the noise surrounding debt payments and social security checks, there’s been very little noise about that other category of government payees: the government contractors. If the US government has to start prioritizing who gets paid first, you may not be too high on their list. Granted, no one at DoD or Treasury can even begin to predict the downrange impacts of default, but it’s pretty obvious that payments would almost immediately be affected.
Let’s hope that cooler heads prevail, but I would keep my eye on this one. It could get ugly in a hurry.