On Thursday, the United States will breach the debt ceiling, and the economy will collapse. Or so you might think. In reality, Thursday is just an estimate for when the government won't be able to pay its bills — after the debt ceiling was breached several months ago.
Despite the countdown clock CNN's been running for nearly a week, October 17 was only ever a guess. As we explained last month, the date was identified by Treasury Secretary Jack Lew as the most likely date at which the government would be unable to pay our bills — because he estimated it was the first day that we'd take in less money than we needed to pay out.
Every day, the government takes in some receipts and pays some bills. Here's what that daily flow has looked like over the last month or so. The blue line is how much cash Treasury ended the day with; the bars are how much the government took in or paid out. You can see that it's relatively consistent.
If there were no debt ceiling, the government could just borrow more money to pay any bills that Congress had racked up in its budgeting. But the debt ceiling imposes an upper level on how much we can borrow. We reached that limit, as The Washington Post noted in its excellent explainer, on May 19. Since then, the Treasury Department has been doing everything it legally can to make sure that bills are getting paid. "We stand a good chance of default," President Obama said on Monday. But when?
According to his September letter, Lew estimated that on October 17, payments that were due would exceed the combined amount the government would take in plus whatever cash we had on-hand. So some bills wouldn't get paid, and we'd default.
Others think that might not be the day. Goldman Sachs produced the chart at right — via Business Insider — which projects that the real drop-dead date is November 1. On that day, a number of obligations come up for payment, including Social Security and Medicare payments. You can see the big spike on the first of the month. An analyst for Morgan Stanley echoed that fear, writing that the firm "expect[s] that the $30 billion in cash they have will last until November 1st, when several large program expenditures are scheduled."
The Birpartisan Policy Center last month estimated that the trigger point could be anywhere between October 18 and November 5, but that was before Lew's letter. One reason it could happen sooner than November 1: a big Social Security bill comes due on October 23. Or it could happen on October 31, the Post adds, since there's a big debt payment due that day. Perfect for Halloween: default and its effects could pop out of nowhere.
So if you insist on having a countdown to economic devastation — which is about the only certainty that exists around any default on our debt, we recommend you use the ticker below: