American Default?

Here we go again, for it feels like the nine hundredth time in the past decade we have another negotiation about American spending. Let me simplify things for you, and then we can get to the implications. The debt limit limits how much money the federal government can owe. It has been raised 78 times in the past 63 years and is currently at about $31.4 trillion. If it isn’t raised then the federal government which runs about a trillion dollars per year deficit has no more money. Basically, that means that the US would default on its bills (bond payments) for the first time ever. It would be a significant hurt to American economic pride, and economic standing but ultimately sort of meaningless in a literal sense. Eventually, those who weren’t paid would be paid, but nobody really knows because this has never happened. Let me simplify the dilemma for you, Democrats want to spend a lot more money on a lot of things, but they only control the Senate and Presidency. The Republicans who control the House want to spend less money on things Democrats want, and more on things Republicans want like oil and coal incentives. They want Biden’s student debt relief cancellation shut down, and they want to nix his IRS expansion. Let me tell you this before you continue reading, we aren’t going to default. Purely from a political point of view, Joe Biden will be crippling any re-election bid immediately by being the first president ever to default, which will be spun viciously. He will cut where he must, point at Republicans, and claim victory on the things he preserved. AMERICA WILL NOT DEFAULT. It is literally just political suicide. Things may get awful close to the wire, but it won’t happen. Someone is going to blink. Let’s say for S’s and G’s that America does default, you should at least buy the fall. The stock market is going to obviously fall because people will lose their minds. I genuinely don’t know if it will be 3% or 8%. Any way you slice it, stocks are going to fall. DO NOT SELL, DO NOT TIME THE MARKET, AND DO NOT SELL WHEN IT IS FALLING. If you’re feeling a lil riskier, or you’ve been told by Kevin Mccarthy and/or Joe Biden that there is zero chance an agreement is reached a day before the deadline you should buy zero-day out of the money calls on the VIX (joke). For those who don’t know, the VIX is basically a tracker of the S and P 500 volatility. It spikes wildly during disasters. It was up 100% during ‘08, and and 150% when people were really freaking out about COVID. Other than that, it sort of just bounces around in the mid-teens, low 20s. The price has been pushed upwards over the past few weeks as more and more people have started to think that the USA will default (they are idiots.) However, if you really think, in your heart of hearts that the USA will default then the price right now doesn’t matter because you will multiply your money so quickly. Now, if the USA doesn’t default just go about business like you usually would. Don’t listen to the panic articles, nothing is going to happen, I would bet my life on it.