The Debt Ceiling and National Security

Bruce Bartlett discusses The Debt Limit and National Security over at Economix.

Also, a rather key observation:

A key reason why the Chinese own so much of our debt is that they are risk-averse and would rather get a low rate of return on Treasuries, even though higher rates are available on corporate bonds and other securities, because the Treasuries are assumed to have zero risk of default and the market for them is the largest and deepest in the world.

Which is one of the various reasons that not raising the debt ceiling could seriously effect our national credit.  It would be a self-inflicted wound to the very thing that makes lending to the US government attractive in the first place.

FILED UNDER: Deficit and Debt, Quick Takes, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter