Debt Default

The Tea Party brazenly lie to the American people that debt default offers no serious penalties. They blithely suggest when it happens, you just pay some of the bills. This is preposterous. Consider what happens to individuals who don’t pay their bills. Let’s say you stop paying your mortgage but continue to pay the electricity, cable and phone. Let’s say you pay just the interest on your credit cards, but no principle and you pay less than the minimum payment. What happens to your credit rating? The fact you paid some bills does not get you off the hook. Your rating will be downgraded. It will stay downgraded even if you start paying your bills again. What happens to your ability to borrow more money? If anyone is crazy enough to lend to you, they will demand a premium interest rate. If any of your loans mature and you have to reborrow money, you will have to pay that premium interest. Eventually you will be paying a premium rate on all your debt.

~ Roedy (1948-02-04 age:69)