Playing with fire. The reality-based community, which apparently excludes about 90 U.S. House members and Pennsylvania's junior senator, Pat Toomey, recognizes that approaching Aug. 2 without lifting the U.S. debt ceiling isn't just gambling with our good name. It's flirting with actual disaster.
U.S. Treasury bonds are an essential piece of the global financial system precisely because they're considered as close to risk-free as any security anywhere. To try to force deep spending cuts without a hint of higher taxes, tea party Republicans and GOP leaders who fear breaking Grover Norquist's antitax pledge are playing an insane game of chicken with President Obama and the Democrats.
"A government default would destroy the credit system as we know it," MIT economist Simon Johnson wrote recently. "There is no company in the United States that would be unaffected by a government default - and no bank or other financial institution that could provide a secure haven for savings. There would be a massive run into cash, on an order not seen since the Great Depression, with long lines of people at ATMs and teller windows withdrawing as much as possible."
Oh, yeah, Johnson also predicts that joblessness would climb above 20 percent. And we're doing this why?
Losing focus on jobs. Even if Obama and the GOP pull us back from the brink, we'll be right where we started before this manufactured crisis began: with a sluggish economy, a 9.2 percent jobless rate, and government responses that seem more hope than plan.
