The entire security of the world economy hinges on government-backed debt. The “Full Faith and Credit of the United States of America” is not just a term bandied about by elite economists. It is the backbone of our entire economy, and the economy, now, of an interconnected world. It was shocking back when Bush said that Social Security debt was “just IOUs” – they aren’t, they are the same debt bonds that China, or Europe, or businesses buy, backed by the Full Faith and Credit of the United States of America. That default would have caused severe crisis with our debtors – just as defaulting on our debt to other nations and businesses would destroy our economy now. Imagine calling up your mortgage company and telling them you intend not to pay anything back. Now, imagine the value of your entire existence plunging right after you do this. This is essentially what Cantor is threatening to do.
To even hint at default in the offering as a political tactic is to jeopardize our entire national interest. It is treasonous. This is who you elected, America. Let’s hope this doesn’t come to pass, or you can kiss the jobs recovery goodbye.
Addendum – remember, Reagan said he doesn’t negotiate with terrorists and hostage takers. So, what is this, then??
Addendum II – Also recall, Congress appropriates funds. By saying “the president has a responsibility, as much or more so than Congress, to make sure that we are continuing to function in a way that the people want” is to state that you abdicate getting the funds appropriated to cover the debt at your convenience – the President has no say on enacting the budget except to sign. This is obviously a threat for him to capitulate to what they demand, or else.