I bond frenzy

I suppose things will happen with the values of the mutual funds, and (depending on how actively managed they are) the managers are currently thinking about how to minimize that.

We in fact hit the debt limit weeks ago, and Treasury has been using "extraordinary measures" to pay the bills since then. I haven't seen a lot of coverage of what all goes into the "extraordinary measures", but the "G fund" that holds some of my retirement from my federal-employee days is apparently one of the sources.* When it's happened before, they've made the fund whole again, with interest, once the cliff gets avoided.

Easy! If you owe money, and you're making your obligated payments, you're not in default! If you stop making those payments, you have defaulted! Amazingly, this definition does not depend on the amount that you owe.

If you have the wherewithal to make your payments, and you choose to stop making them anyway, to make some kind of a point, and torch your credit rating, and face higher interest charges and more hardship staying solvent in the future, well ....

If you were an individual, and had a spouse or a family, and chose to behave that way, possibly you would find yourself at liberty to make other living arrangements.


* seems they don't actually take money out of the G fund, they just stop reinvesting it in the Treasury securities that mature, so that doesn't become new debt, and the G funds are sitting around as cash and earning squat.