The US 14 trillion dollar national debt is the largest in the world and cannot possibly be paid short of being largely written-off. It is mathematically impossible given the now total decimation of our manufacturing base and in the absence of a New Deal approach to job creation which has not and is not happening. No amount of spending cuts and or tax increases could ever hope to pay the US national debt which if unfunded liabilities are taken into account now exceeds 70 trillion dollars. If interest rates rise as a consequence of a credit downgrade and or a failure to reach an agreement on the debt ceiling, the interest payment on the national debt will rise even further and more quickly.
The fact that interest rates have been kept at an all time low for years has artificially decreased the apparent size of the national debt. This was accomplished as a result of the federal government altering the way in which inflation is calculated and the mechanism utilized for determining the unemployment rate. Inflation is currently about 10% and the actual unemployment rate is roughly 20% not the official 2-3% and 9-10% respectively, officially reported. This indicates that we have a serious economic depression and what in the 1970's was termed stagflation. The misery index is at least 30 (the Arithmetic addition of the unemployment rate and the inflation rate).
Much of the US national debt was illegally and immorally created either through outright fraud (the 2008 bank bailouts which have now been estimated at over 16 trillion dollars) or despite the express wishes of the American people (tax cuts for the wealthy, multiple foreign wars of aggression, a prescription drug program etc. none of which were paid for). Currently, the admitted national debt is equal to the size of the entire GDP and will soon exceed it. As professor Michael Hudson has written, "Debts which cannot be paid won't be."
There is no constitutional requirement that mandates the existence of a debt ceiling. Whether we have one or not is a non-issue. With 14+ trillion dollars of national debt, why should anyone seriously object to more? As Paul Craig Roberts has pointed out, Citibank alone received over 2 trillion dollars from the Federal Reserve. Surely another 2+ trillion dollars of national debt is no problem since they can print money without restriction. The point is that the national debt is already well beyond any realistic hope of being paid. Much of it will eventually be written off--of necessity since it will be impossible to pay given the universal physical laws/constants which govern our world.
What we should be doing is commencing with the radical structural changes in the global monetary system that are required to prevent a world-wide catastrophe. First on the list is a new Bretton Woods type international monetary agreement. Second, we must either end or nationalize the Federal Reserve now and third, make derivatives illegal. Fourth, too big to fail banks must be allowed to fail. It is imperative that a New Deal II type jobs program be enacted immediately which should include a Manhattan level Project for restoring the US manufacturing base through science, technology and new commitments to improving education. This should also include close to a 0% interest rate on loans to businesses engaged in the production of hard commodities. Fifth, appropriate tarriffs should be erected to protect US manufacturers. Sixth, all Americans should write/phone their congressional delegations. Here is a sample letter to consider.
Letter to Congress: Include a Manhattan type level project for restoring the US manufacturing base through science, technology and committments to improving education.
I respectfully demand that you reject any budget deal that cuts Social Security, Medicare or Medicaid, and request that you raise the federal debt limit now without conditions.
Entitlements are legislatively guaranteed human rights which flow from the Natural Moral Law. You are well aware that Americans contribute to their Social Security and Medicare benefits through their payroll withholding taxes. It is factually incorrect and sophistic in the most reprehensible way to suggest that Entitlements represent unearned give-aways or welfare.