The far right has no clue what they are messing around with. Raising the debt ceiling has never been an issue before. It should be noted that the U.S. has a few more years left before our expenditures of GNP outpace our revenue resources. Realize of course that our national debt is a major issue. If memory serves, we are roughly around 70 cents out of every dollar going toward debt, with 41 cents going toward social spending. This is nowhere near the high 90's of Spain and Italy and the 120-percent-over-revenue intake that Greece found itself in. This information comes from a recent Foreign Affairs Quarterly and "The Global Budget Race' (The Wilson Quarterly, Autumn 2010.) For those not familiar with Foreign Affairs, it goes out to a little over three-thousand individuals around the globe. All congressional offices receive one and many in the diplomatic core. This publication is a national debate on the direction of foreign policy, offering various viewpoints and is a great indicator of the direction of policy for anyone who has such an interest.
At the very least, a failure to raise the debt ceiling will result in the U.S. credit rating being lowered. This will automatically generate higher interest rates leading to another round of layoffs across the nation, as major corporations cut back in order to preserve their billion dollar quarterly profits. At the same time, small businesses scramble to simply stay afloat. This is why Wall Street is up in arms over the actions of the right-wing monster it has created. Should we avoid this situation and raise the debt ceiling, the interesting political thing to watch in the upcoming elections will be where Wall Street puts its money.
At worst and what has many Wall Street investors shaking in their over priced suits is a global economic melt down. If the U.S. credit rating is lowered, a shock wave of economic reprisals can be expected to hit the global market. Inflation at this time will more than likely sink the economies of Spain and Italy, taking down the EU. This will cause a complete to near complete collapse of the global market and end crucial deliveries of many JIT services. The result: another Great Depression.
Benefits, individuals such as the Koch brothers and their merry band of Billionaire brethren will find themselves in a position of extreme power. In fact their design of libertarianism may come to pass. Where they come sailing in and privatize most of the public services that are now offered, examples of this would be police, fire fighters, road services, etc. It would be pay as you go, where the masses would be left lacking, and walled communities would live large. I speculate by Monday, July 25, the role of being a responsible adult will be passed to President Obama, with the Tea Party republicans gaining what they were really after, a public bulletin campaign slogan for 2012.
After all America, without a means of rasing additional revenue, there is no solution to our current economic malaise. Whether that is closing offshore and onshore tax loopholes for corporations and lowering their current tax rates to match those within the EU, thereby raising revenue collected. Or raising the tax burden on the upper classes in America now, and over time raising taxes across the board as the economy rebounds. We still need to restructure our domestic, military and foreign spending.
The longer we wait, the more likely the great global engine of economic growth will come crashing to the ground.