I just listened to two "gurus" on CNBC discuss the potential fallout should the now-thinkable happen. Their assessment was virtually identical to the mainstream media's (fostered by many of today's deep thinkers): that defaulting on the national debt would be cataclysmic.
Well, not so fast...
Yes, I understand that if indeed the U.S. could not honor its obligations all hell might break loose. But the thing is, it absolutely can honor its obligations, with ease. The U.S. dollar, as much as other nations pretend to wish otherwise, is still the world's reserve currency. The U.S. would not default due to any looming structural disaster (not that we don't have structural issues mind you, it's just that they're apparently not yet sufficient to inspire the rest of the world to abandon the world's reserve currency). The U.S., today, would default only as a result of the political will of Congress to not raise the debt ceiling. And that, by the way, is a will that simply does not exist.
But let's say I'm wrong, let's say it happens, we miss an interest payment and---as so many are predicting---the world begins its spiral. If the experts indeed have the fallout story correct, you'll see that tea partying Congress turn into teetotaling wimps faster than you can say Obamacare ain't so bad after all. They'd catch up that payment so fast your head would spin, and very likely---as a promise to our international lenders that it'll never happen again---pull a complete 180; pass new legislation eliminating the debt ceiling forever. And, alas, boot our structurally flawed fiscal can ever further into our children's future.
Now you might think, given the less than rosy opinion I've expressed of the Tea Party movement dating back to the last general election---when one of its cofounders endorsed Rick Santorum---that I'm no fan. It's not that I don't sympathize with much of the message, in fact---when we're talking limiting government---I indeed do. I guess I'm just not a fan of political movements in general. By the time they open their offices, elect their officers and establish their budgets, they exist purely for their own sake, as opposed to for the sake of their stated ideal. Which leads to, among other inconsistencies, the endorsing of a candidate whose voting record is anathema to what the organization supposedly stands for---simply because he appears to have a fighting chance.