All eyes are on the debt ceiling debate. I’m in the camp that believes that regardless of whatever other issues we face relative to the size of the debt, without an increase in the debt ceiling the effects would be immediate and catastrophic. Interest on the debt would be paid, but everything else would have to be cut by close to 50%. Millions of people, businesses, and institutions would not receive payments that they are expecting and in most cases absolutely depend on to survive or continue operating. The first order economic effects would be huge, and the world economy would reverberate accordingly.
I cannot believe that the majority in Congress would allow this to happen. There is a group on the Republican right who are pursuing a Reichstag fire strategy to force a showdown over the Constitutional nuclear option whereby Obama would be forced to invoke the 14th Amendment to go ahead and pay the bills. This faction is then betting that the Supreme Court would strike down that action and force draconian budget cuts on the US economy. The result of this strategy would be governmental paralysis, economic chaos, and a possible power vacuum. It cannot be allowed. Cooler heads must prevail, otherwise we could face an immediate future that is too awful to even contemplate.
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