I was listening to Paul Krugman and realized why the GOP wants the U.S. to default on its debt [View all]

[LuckyTheDog]

Krugman pointed out (as he has many times) that the debt of Japan is far higher than that of the U.S. as a percentage of its GDP, but it is able to borrow at low rates anyway. Then it occurred to me: That's because Japan has not defaulted. To a degree, buyers of sovereign debt care about the ratio of GDP to debt. But what they care most about is the political will and ability of a country to keep making the payments.

If the U.S. defaults, that basic trust is broken. Instantly, U.S. federal debt becomes a far bigger risk than it once was and interest rates go up -- a lot. And just as instantly, the prospect of a Krugman-esque program to boost the economy and expand the middle class becomes a moot point. We will have blown the chance to even try it.

It's for that reason that I think the GOP will keep playing games again with the debt ceiling. They might back down this next time if the position turns out to hurt them in the polls. But make no mistake: In a second Obama term, it's very likely that they will dig in their heels to force a default. They might be able to do it.

If Romney wins, of course, this strategy won't be necessary. The GOP would just go on its merry way enacting the Ryan budget. The Democrats in the Senate would try to stop them. But, with a president in the White House who would be willing to just shut the place down, the Dems would not have much leverage.

The end result of either scenario: Massive social unrest, a military backlash, martial law in some places and, ultimately, the break-up of the United States within a few years. The South would be free to become the racist, brutal, militarized corporate-ruled cheap labor farm it was always intended to be. Oh, joy.