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Lou Crandall & Joseph Wang: A Monetary Plumbing Masterclass

Forward Guidance

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The Politics of Payment Prioritization

The government could technically avoid a default on its debt by prioritizing payments to Treasury holders. That way, even though the government reaches its debt ceiling, it doesn't have to default. I think they can probably do that for some time, actually. But it would make a lot of people who depend on the federal government for their paycheck very unhappy.

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