Republicans are playing chicken with American prosperity. The stakes could not be higher. Most Americans see this as another pawn in the endless jostling between politic factions, but it is not. It stands to reverse the expensive and tentative recovery which we are only beginning to enjoy and throw the American economy into a crisis similar to that of Greece relative to the European Community:
May 14 (Bloomberg) — U.S. Treasury Secretary Timothy F. Geithner said a default arising from failing to raise the debt limit could cause “irrevocable damage” to the economy, risk a “double-dip” recession and increase unemployment.“Default would not only increase borrowing costs for the federal government, but also for families, businesses and local governments — reducing investment and job creation throughout the economy,” Geithner said in a letter dated yesterday to Senator Michael Bennet, a Colorado Democrat.
Failing to raise the $14.29 trillion debt ceiling would “force the United States to default” on obligations such as payments to service members, citizens, investors and businesses, Geithner wrote. “This would be an unprecedented event in American history. A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment.”
Ian Katz and Daniel Enoch – Geithner Says Damage From Debt Default May Be ‘Irrevocable’ Bloomberg 14 May 11
Republicans seem intent to use this opportunity for a Norquist-style drowning of the economy, which they can then blame on the incumbent administration in the run-up to a desperate presidential election cycle. Is this the party of patriots or economic suicide-bombers?