Originally Posted by Villages Kahuna

I think you're terribly wrong, DK....dangerously wrong! I think a few other things will happen if Congress refuses to increase the debt ceiling. Don't get me wrong, I'm not proposing that 'the 535' simply authorizes more borrowing. I'll be very disappointed if they don't keep such authorization short and definitely have any such approval conditioned on some very aggressive spending cuts, a move in the short term towards a balanced budget, or some other legislation that might suggest a semblance of fiscal responsibility.

But back to your assertion that "not raising the debt ceiling won't do a darn thing". There is no bankruptcy court for sovereign nations. There is no creditors committee who negotiates which of them will take the write off of their loans and investments. There is no group of lenders to provide interim financing until a balanced budget is achieved. I don't think it's much of a stretch to conclude that any and all of the following would result.

• The debt rating agencies would immediately drop the credit rating of U.S. bonds and bills from AAA to AA or maybe even lower. That would severely constrain our ability to borrow in the future, probably permanently.

• As our debt which on average is very short-term in duration rolled over, the interest rates on any new debt we might issue to fund the rollovers would increase substantially. Default would be a distinct possibility. Even at current low rates the CBO projects that the combination of rising debt and rising interest rates is projected to cause net interest payments to balloon from 1.4% to 3.4% of GDP by 2020. Lowered debt ratings would increase the amount we spend on interest on the national debt substantially. Having our interest payments rise to the level of the current defense budget is not beyond possibility.

• Both the stock market and bond market would have significant declines in values. No one really knows how the markets would react, but a decline in value of "Black Friday" proportions, as much as 50% or more, isn't out of the question. With the resulting uncertainty, the banking system would grind to a halt.

• Unemployment would skyrocket as our economy ground to a halt because of the uncertainty caused by the failure of our government. Without federal money, there would be no unemployment benefits.

• The federal government would be thrown into complete turmoil. Because there would be no way to pay for any "discretionary" government services, most or all of them would have to be shut down. Services such as Homeland Security, the air controllers, the entire regulatory infrastucture, would have to be shut down because there would be no money to fund their continued operation. In time, they'd be restarted at substantially lesser levels of service--most of what we know as "government" would have to be almost eliminated. It would take Congress months and months to finally agree at what non-discretionary programs would be reduced in order to return funding for discretionary programs. But until Congress reached some very complicated conclusions, our lives would change immediately!

• Our military operations would have to be shut down immediately. Arguably, there wouldn't be enough money to pay for additional munitions, hospital and rehab care, or even enough to pay for the travel expenses to bring our military home from wherever they are in the world.

• Medicare and Social Security? There wouldn't be enough money to fund next month's checks.

• Should I keep adding to the list??

Making thoughtless and misinformed statements such as yours is what's dangerous about public forums such as this one. What's worse is when the person making such thoughtless statements is serving in an official capacity--in your case "Administrator"--on a public website.

DK, I'd really suggest that you think a little bit before you make such dumb statements. You may influence others who don't choose to think about what's being said, relying on statements such as yours as fact, which would almost certainly result in detrimental results in their lives. I don't think that would be your intent.