ALEXANDER Says we must meet two “urgent” goals: reducing our debt, and meeting our financial obligat Alexander: “We Can’t Go From Being the Most Creditworthy Nation in the World to Being a Nation that Pays Its Bills Out of a Cigar Box”
and he puts the bill in a cigar box. Then another bill comes in and he puts that bill in a cigar box. Then the next week maybe some money will come in. So my friend will reach down to his cigar box and he will pull a bill out and he will pay that bill. Then, when a little more money comes in the next week, he will reach down and pull out another bill and pay that bill. My friend pays his bills out of a cigar box. Now what happens to my friend if he wants to go down to the local bank and says he would like to borrow some money in order to pay all the bills he has in his cigar box?
I think what the banker is going to say is, “I am sorry, my friend, but we are reluctant to loan money to you or, if we do, we are going to charge you more for it because we don't know whom you are going to pay.” You might reach into your cigar box and pay the whiskey store instead of the bank. You might pay the grocery store instead of the principal on your loan. You might pay the service station before you pay us. So because you selectively pay your bills out of your cigar box, you are not a good risk. We are going to charge you more to borrow money or we are not going to loan you money at all.”
That is the risk we take if we play around with this idea of the United States of America – the most creditworthy country in the world – selectively paying its bills, going from being the most creditworthy country to being a country that pays its bills out of a cigar box. There are three obvious reasons why we should not do that. Reason No. 1 is, it is going to cost us more. Today, the United States of America can borrow money for 10 years at about 3 percent. We are so creditworthy – people trust us so much to pay our obligations – that they will give us money for a short period of time at no interest. It is a tremendous advantage to us. The United States has the most risk-free credit in the world, and I might add the most risk-free credit in an increasingly turbulent world.
What if we decided after August 2nd, when we are told sometime in that month we will begin to not have enough money to pay all our bills, what if we decided not to raise our debt ceiling and that we would pay our bills out of a cigar box? We might say, “OK. We don't have enough money, so we will pay China before we pay grandma her Social Security.” Oh, better not do that. In fact, I saw a fellow in Portland, Tennessee, on Monday and he said, “What is this about my Social