“The full consequences of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar.”
Answer when and if my brain wakes up.
UPDATE: It was the 40th president of the United States, Ronald Wilson Reagan, who knew a thing or two about increasing the national debt.
I see several commenters complaining that I hadn't "addressed" President Obama voting against raising the debt ceiling when he was senator. That's because I hadn't "addressed" anything yet, buit now that I am: Obama's vote proves the stupidity of using an issue this important to score a cheap political point.
Honestly, I don't see how this thing plays out that isn't a disaster. If you agree, as sensible people once did, that fixing the debt involved a mixture of spending cuts and tax increases, then it would be relatively easy to compromise on the amounts. But this has become one of those all-or-nothing issues: I can't imagine the Democrats making a deal with no tax hike, or the GOP ever agreeing to one. The wild card here is Obama, who seems to be basing his 2012 re-election on his ability to get things done -- he can "get this done." if he gives into Republican blackmail.
It wouldn't be the first time.