What will happen without a debt ceiling increase?

I just read an article about the debt ceiling increase on Yahoo Finance.  The article itself showed that the author was very good at copying talking points, but one commenter made some very good observations. His remarks are listed below…

There will be NO default, I wish reporters reported and actually investigated stories not just reprinted speeches and talking points. THE US WILL NOT DEFAULT ON IT’S DEBT.
What will happen is the US will have to shut down parts of the govt if there isn’t a budget in place and the spending limit raised. But, should no deal be reached, the govt still has enough money to
1) service the debt (approx 30 billion a month)
2) pay social security medicare , medicaid.
3) pay for the military all branches plus contractors
4) still have approx 36 billion left over each month to spend.

This is because the US takes in 200 billion a month in receipts, then it borrows 176 billion a month, so no raise to the spending limit means we can’t borrow, it doesn’t mean we’re broke.

Obama Debt Diet Cartoon

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