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Showing posts from July, 2011

Default Ain't My Fault

It's not easy to get a grip on this "debt ceiling" thing, but here's a thought experiment.

Suppose you're the CEO of a corporation. In many ways, the buck stops at your desk. But, you answer to a board of directors and there are certain decisions that must be made with the consent of the directors.

Business has been tough in the recession. Though you've done your best to control costs, there are some expenses which have resulted from investment in equipment and facilities while business was brisk. Like all busniesses, you financed expansion by borrowing. The payments on the loans are still due regardless of your current business level.

The problem right now is that you're up against the credit limit that's been established. You need to fulfill current orders and to receive the revenue for these orders which will allow your business to continue, and hopefully to weather the current storm. But, you can't pay for the raw materials, front the payroll,…