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Here’s the latest from the Wall Street Journal on how Main Street is reacting to the debt ceiling stalemate:

In a recent survey by the Association of Financial Professionals, which represents treasury and finance executives, half of the 305 respondents said failure to reach an agreement by the Aug. 2 deadline would have a detrimental impact on their access to capital and short-term investment strategies.

Half of the respondents planned to take defensive actions, such as a freeze on hiring, reducing capital spending and drawing on credit lines to build cash, the AFP said….A quarter of the companies surveyed that hold U.S. Treasury securities said they would sell at least some of them if Congress and the White House failed to reach a deal.

….Corporations are worried about a default because the consequences for the financial system are unknown. Treasurys serve as the basis for companies’ borrowing costs, are key holdings for banks and money-market funds and are used as collateral in short-term lending markets.

I’m still flummoxed about this. If we run out of money, the federal government will stop paying some of its bills. That’s bad, and it will quite likely have a negative effect on the economy. Corporations are right to be apprehensive about this.

But that’s all that will happen. Treasury bonds will continue to roll over and interest payments will continue to be made. That means there’s no reason to sell Treasurys; no reason they can’t continue to be used as collateral; no reason that access to capital should dry up; and no reason that companies will need more cash.1

At least, that’s how it seems to me. What am I missing here? I feel like I must be an idiot or something. Is the answer something so obvious that no one ever mentions it, or something so arcane that it never gets explained in lay terms? Or is everyone else crazy? Or what?

1And, by the way, no tangible reason that ratings agencies should downgrade U.S. debt. We’re going though a political dispute, not a crisis that impairs our ability to service our debt.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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