America defaulting on its debt would have been an act of war. The world would have judged against the future generations of Americans, and that judgement would have been war.
There were many debt deniers in the political environment who said that the US had enough money coming in to pay the interest on our debt.
But what these debt deniers didn’t understand, our ability to use that money depends on sovereign nations accepting the dollar, and accepting it mostly freely. The act of George W. Bush dumping 9 billion of US dollars on the Iraqi economy at the start of the Iraqi War was not a wasted act. The act of dumping money made the use of the dollar in the Middle East something that many wanted, and will be for some time.
On the other hand, the US has a war machine that could be used to make a sovereign nation take our money, but not the world.
But the first act for Obama, after the House let our debt default, would still have been to introduce a Large Wars Powers Act to the same Congress.
Most likely things would have gotten worst on the second day.
The Republican-controlled House canceled a vote Tuesday night on a plan to reopen the federal government and raise the debt ceiling after support from conservatives for the deal crumbled, leaving Washington without a clear path forward for avoiding a first-ever default on the nation’s debt.
The Republican-controlled House does have a clear path forward, it’s just that the path is so insane that no body in Washington understands its simplicity.
The Republican-controlled House plans, because the House Conservatives are such “doers“, to piecemeal the handling of the U.S. debt. This path is similar to the piecemeal starting of the government that the same House Republicans favored during the shutdown of the government.
To understand the Republican-controlled House one needs to understand that, in the minds of the now Republican-controlled House, Hurricane Katrina was not a failure of small government.
To the House Republicans (they can be now called a George W. BushRepublican majority held House)Hurricane Katrina was a failure of the people to adapt to small government.
As such, Hurricane Katrina now represents how the House Republicans plan to govern the U.S. budget, in this time of crisis.
For the Democrats, I suggest they find higher ground that is not located in Washington D.C..