KANSAS CITY, Mo. —There's a difference between being unable to pay your bills and being unwilling. It's the difference between Greece and the United States.
Governments in both countries face August deadlines to avoid potentially defaulting on part of their national debts. And that's about where the similarities end.
Greeks have taken to the streets in violence. The prime minister offered to resign — and then not to resign — in his push for a rescue plan. The battle is over how much economic pain Greece must bear for a second European-financed bailout.
Uncle Sam, on the other hand, can avoid default simply by agreeing to pay his bills. He'll have no problem getting the money.
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But keeping current on the national debt has hit a political roadblock that the U.S. Treasury says needs to be cleared by Aug. 2 if it's going to make ends meet. The pressure increased Thursday when House Majority Leader Eric Cantor, R-Va., abandoned talks to reach a deal.
No one really knows what would happen if Congress doesn't raise the U.S. debt ceiling and the government lets a debt payment or two slide. It simply hasn't happened before.
However, just waiting for congressional action is expected to drive up interest rates, not only for the government but also for every homebuyer, car shopper, corporation and small business.
The closer America gets to Aug. 2 without resolving its debt deadlock, the more that bankers, investors, money managers, foreign governments and others will begin to think about the unthinkable.
Could the safest investment in the world go sour?
"I don't think it can happen because the consequences are so great," said Hank Herrmann, CEO of the Overland Park-based mutual fund company Waddell & Reed Financial Inc.
A U.S. default could mean another financial crisis on top of the 2008 crisis. It's more than enough reason to work out a solution.
"Nobody expects a real meltdown," said Chris Kuehl, managing partner of Armada Corporate Intelligence in Kansas City, Kan. "But there could be enough confusion to cause some heartburn for a week or two."
There is a reason the U.S. Treasury owes the rest of the world $14.3 trillion. It's the safest borrower on the planet.
The Treasury gets its financial stamina from the U.S. economy, still the largest in the world. And the whole world does business in U.S. dollars, which is what Treasury debts mature into. Besides, the Treasury prints the dollars.
Lenders are so sure the U.S. will pay off its debts on time that they charge only enough interest to make up for expected inflation and a little profit. There's no extra tacked on for fear the U.S. won't pay.
Everybody else pays a premium to borrow, depending on how much of a credit risk they're seen to be.
Practically everyone is willing to buy more U.S. Treasury bonds, notes and bills, despite all the debt America already owes, its weak economic recovery and swirling threats to its highest of all credit ratings.
But Treasury isn't selling now. It's hit the debt ceiling.
Congress sets a borrowing limit on the Treasury to control how much debt the country can go into. America's is the only government to do so.
America can turn on the credit tap itself by letting the Treasury sell more securities. Congress would just raise the debt ceiling, as it has many times in the past, often routinely.
This time, however, some lawmakers won't agree to raise the debt ceiling until Congress agrees to major budget changes to slow down the nation's accumulation of debt. At $14.3 trillion, it' s threatening to eclipse the size of the nation's annual economic output or possibly grow out of control.
Other lawmakers are willing to make budget changes too, but in different areas or amounts. The debate drags on as Treasury's deadline nears.
"August 2 is important. Anxieties will increase," said Bob Gahagan, a senior vice president in the Mountain View, Calif., offices of American Century Investments. "It's been drawn as a line in the sand whether we're going to be serious about our debt situation in the U.S. It really isn't, but that's what it's come down to."
Washington's pristine credit score depends on resolving the debt ceiling and budget problems.
In April, Standard and Poor's Corp. said its outlook on the nation's AAA rating had turned "negative" rather than "stable." It doesn't expect agreement on a long-term plan to curb U.S. debt before 2013.
Earlier this month, Moody's Investors Service focused on the "small but rising risk of a short-lived default" because of inaction on the debt ceiling. Unless Congress shows progress "by the middle of July," Moody's promised to review the U.S.' s AAA rating "for possible downgrade."
Kuehl said that effectively sets a new deadline somewhere during the second week of July. Failure to act by then, he said, may signal to markets that Congress won't have enough time left.
"Will we wait until it becomes an emergency before we act?" he said. "It's looming. We're getting very close to it."