A Federal Default Invites Catastrophe -- By Tony James, The Wall Street Journal

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The government could fall $5.5 trillion behind by the end of the year.

I have always been amazed that anyone would choose to play Russian roulette. Who could ever be so bored, so irresponsible, or have such low future aspirations that they would flirt willfully with death while having nothing to gain?

Yet Congress is doing just that with the debt ceiling. Except there won't be just one victim. Every American will suffer.

Oct. 17 is just a guess of when the government runs out of cash. Look at Treasury's daily cash balance. It can swing by $50 billion a day. Can we be so sure we won't trip into the abyss sooner? Won't government suppliers and creditors, wherever possible, rush in to seek payment early, severely increasing the risk of a miscalculation?

If we do hit the debt ceiling, it is possible, even likely, that the government will eke out some additional cash. By selling some assets or by prioritizing some payments, it could muddle through very briefly.

But none of this is certain. If nothing is done, the Treasury will be short about $106 billion by Nov. 15, excluding debt maturities. Something has to give. There is a suggestion that the Treasury can pay certain priority items (such as interest) and not others (such as contractors).

The question is whether even this is feasible. Other than interest on U.S. government debt, which is paid through the Fedwire system, the Treasury makes over 80 million individual payments each month through a computerized payment system.

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