Some U.S. Contractors Haven’t Been Paid (Even After a Court Order) – What Happens If the Treasury Starts Picking Winners and Losers?

Some federal contractors still haven’t been paid, even though there’s a court order saying they should be. Meanwhile, the Treasury is paying other obligations.

If Uncle Sam is now deciding who gets paid and who doesn’t, what does that mean for U.S. debt holders? Treasuries are supposed to be risk-free, but if selective payments start happening, isn’t that basically a soft default?

At what point do bondholders start sweating? Or are we just so used to government financial acrobatics that nobody cares?