[Lost from site and reposted.]
Let's try taking Boehner at his word and see what will happen. After all, he appears convinced that the Tea Party idea of not raising the debt ceiling is a good one.
Here's a likely scenario:
1. We cannot sell any more T-Bills;
2. We can spend only what we collect in tax revenue;
3. That's a 30% reduction in the revenue shown in your 2012 Budget;
4. Let's continue following Boehner, so we won't raise any taxes and we'll reduce expenditures by 30% or $1.1 trillion and we'll do it across the Board;
5. But, wait a minute - since we won't raise taxes and cannot borrow, we will be taking $1.1 trillion out of the economy;
6. That will reduce GDP by some $4 trillion more or less because of the Aggregate Demand multiplier effect;
7. GDP will drop from a forecast $15 trillion to $11 trillion - that's a 25% drop in GDP;
8. A 25% GDP drop is very similar to the GDP drop in the Great Depresssion;
9. We would expect great increases in human misery and social problems - 25% unemployment, increases in crime, violence, and drug abuse - from the GDP drop alone;
10. Also, the drop in GDP would reduce tax revenue, so that government spending would have to be reduced even further, creating an ever descending whirlpool of depression and social misery;
11. Additionally, in the beginning, Defense, Social Security, Medicare, and Medicaid spending would drop by the 30% revenue reduction just to balance the budget - our national defense would be 30% weaker;
12. Since we could no longer pay interest on the outstanding debt, we would not be able to borrow in the future, even if we wanted to;
13. State and local governments would also see large budget shortfalls from the depression and lost tax revenues, leading them to cut security and education spending;
14. With a lack of police and security personnel, we would see a great increase in terrorism;
15. With a lack of schools, we would see great increases in gang activity - basically, no neighborhood will be safe from violence;
16. Due to reduced budgets and increased violence in the Homeland, we would call all troops back from foreign countries to provide order at home;
17. We would lose two wars to the Taliban and Al-Queda - and we would retreat from the war on terror;
18. With no effective American presence, countries like Iran and Syria would be free to take over Iraq and attack Israel.
This is the future the Tea Party wants for us.
I hope you don't agree, Barry.