The debate on the debt ceiling continues. However, one idea that has mostly been discredited is that the U.S. would default on its debt if we don’t increase the ceiling immediately. I was on C-Span this morning talking about this issue with the Peterson Institute’s Joseph Gagnon. While we didn’t agree on everything, the two of us absolutely agreed that not only won’t the US default on its debt but also that it doesn’t have to. Secretary Geithner has a lot of options to prevent a U.S. default. Here is our very friendly debate:
I have written more about the debt-ceiling debate here, here and here.