Here’s a very good, very stark article on Slate on what happens if the debt ceiling isn’t raised.
I wrote a whole article on the catastrophes that the Tea Party is wishing on the country, but I can’t put it any better than this: 20% unemployment and a collapse of the private sector.
Some Tea Partiers seem to think that a collapse would be fine because it would bust the Big Bad Government. They don’t realize that 1) busting the government will also bust business, which depends on low-risk Treasury bonds as the fallback safe investment; and 2) engineering Great Depression II would likely end up where Great Depression I did— i.e. a half-century of liberalism.
The next couple week are going to be morbidly interesting. I wonder if McDonnell’s plan is going to suddenly get traction; what’s interesting about it is that it’s a total GOP capitulation: Congress gets out of the debt ceiling business for a couple years, but reserves the right to tut-tut.