There’s a new meme going around Republican circles. Evidently, if the United States doesn’t raise the debt ceiling — the nation won’t default on its debt obligations and everything will be just fine.
In an appearance on CBS This Morning, for example, Sen. Tom Coburn (R-OK) said, “Look, the debt ceiling and the [continuing resolution] are the same thing. There is no such thing as a debt ceiling in this country because it’s never been not increased and that’s why we’re $17 trillion in debt.”
What the — I don’t even —
That makes no sense. But it gets worse.
Sen. Coburn continued by saying, “And I would dispel the rumor that’s going around that you hear on every newscast that if we don’t raise the debt ceiling, we’ll default on our debt. We won’t.”
Um. Yes we will. If we don’t raise the debt ceiling we won’t be able to pay on the debt that already exists, therefore our creditors will, you know, freak out. This will likely send the world economy into a death spiral that would dwarf the collapse of Lehman Brothers. In fact, our debt is 23 times larger than Lehman’s debt in the Fall of 2008.
Here’s Bloomberg with just a taste of what might happen:
Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
But go ahead and believe Coburn, a physician by trade. After all, what do “dozens of money managers, economists, bankers, traders and former government officials” know anyway?