Some Republicans Say Debt Limit Fuss Is A Lot Of Hype

For weeks, economists and bankers have been warning that there will be catastrophic consequences if Congress fails raise the nation's borrowing limit.

They say it will mean the nation will default on its debt, which could rock U.S. and global markets. The Treasury has warned that it will exhaust the "extraordinary measures" it has been using to keep paying the nation's bills by Oct. 17.

"To actually permit default, according to many CEOs and economists, would be — and I'm quoting here — 'insane,' 'catastrophic,' 'chaos,' " President Obama has said. "These are some of the more polite words. Warren Buffett likened default to a nuclear bomb."

But to a small group of Republicans in Congress, these warnings are just a lot of hype. They believe the country will not default, even if the debt ceiling is breached, and all the fuss about the debt limit is just fear-mongering.

"To suggest that we can't pay our debts — that's absolutely not true," says Rep. Phil Gingrey of Georgia.

The Republicans in this group have different theories about why the country is not going to default, but the conclusion is the same: Let Oct. 17 come and go without raising the debt ceiling, and America's going to be A-OK.

~snip~

Joe Barton of Texas (...) says the U.S. can prioritize certain payments — and skip payments on less important things.

"You know, paying the travel expenses of the secretary of commerce, maybe we will only pay 50 percent of that next month — or National Labor Relations Board, or some of the discretionary items that we can postpone," he says. "You know, it can be managed."

~snip~

And that takes us to another theory. Rep. Ted Yoho of Florida says as long as the United States keeps paying all the interest on its debt — meaning, as long as U.S. bondholders get paid — the nation's technically not defaulting.

"Default is not being able to service your debt," he says. "We've got plenty of money coming in on a monthly basis to service our debt."