Reuters reports:
U.S. Treasury Secretary Timothy Geithner formally requested that Congress raise the $12.1 trillion statutory debt limit on Friday, saying that it could be breached as early as mid-October.
“It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations,” Geithner said in a letter to Senate Majority Leader Harry Reid that was obtained by Reuters.
Robert Murphy posted a decent question in response:
When somebody owes you money, do you feel reassured when they say, “It’s fine, I’ll pay you back. I just got a new credit card?”
What builds trust? What destroys it? What store of value is safe?
Why do we still pretend?
