Raise the Debt Ceiling
This Reuters article says the Chinese are concerned. It would seem that we should be concerned, too, if only because the Chinese hold $1 trillion of our debt. In theory we have the Chinese over a barrel because of the old MAD theory (Mutually Assured Destruction). If the Chinese destroy the US dollar, they lose their trillion dollar investment. But in this case, the US is threatening to take the first MAD step by destroying the value of its own currency.
The Republicans say that maybe nothing bad will happen, that the US can stop paying interest for a few days or weeks and then, when the budget negotiations are finished, it can start paying again like nothing ever happened. Maybe. But the Chinese analogy to playing with fire is apt. We don’t know for sure what will happen, and we might burn our own house down. Why would we want to even risk the possibility of that?
Another possibility is that Treasury would take the money to pay interest on the debt from Social Security and government pension funds. As a retiree this really ticks me off. As a Vietnam veteran, I support shared sacrifice, but this is like the draft during the Vietnam war and voluntary military service in Iraq and Afghanistan now. There is no shared sacrifice. Only the fools sacrifice because of some insincere patriotic appeal, like Sarah (Paul Revere) Palin’s. Sarah Palin gets rich, while the redneck grunts in the Middle East die. In this case, the ordinary retirees will sacrifice so that we can pay interest to Chinese millionaires and American billionaires in New York who wouldn’t lift a finger to defend the US, although they were the ones attacked on 9/11.