So, Uncle is set to crash into the debt ceiling as soon as June 1st.

Major media outlets report that as effectively the first time in our nation’s long and storied history that we default on our lawfully begotten debt. That’s the 100,000 foot view, but what does it really mean aside from the United States sinking even further into laughing stock status among the nations of the world.

Well, here’s a quick breakdown on some of the ill-starred consequences:

The federal government must immediately begin living entirely within the bounds of its “cash” revenue stream (i.e., Uncle Sam can only spend what he raises in taxes and other fees). It means spending will be prioritized… somehow. Whether that means meeting its payments to creditors, making payroll for the Armed Forces, or sending out Social Security payments remains to be seen. However it’s divided up, the operating budget will be cut to the bone and some essential services simply will stop. I’m as big a fan as anyone of getting the government down to a responsible level of spending, but this is a catastrophically bad way to try making those cuts. Doing things with no time for thought or the application of academic rigor is an inherently stupid way to run a country.

The cost of borrowing will increase across the board – that’s bad for Americans looking to finance a new home or a car and it’s even worse when the government gets through a default and starts borrowing again. On the other side of crashing through the debt ceiling is a world where loaning money to the U.S. Government is inherently riskier since it’s shown its willingness to default. The increased rates creditors will demand will be correspondingly high and will ripple out to impact all borrowers. .

Market unpredictability. The U.S. Government has never defaulted on its bills. Whether that causes a blip or a catastrophic meltdown of the international financial system that’s been in place since the end of World War II is completely unknown. I’m not in any way sure why we’d even consider collectively rolling the dice on that.

Abject political fuckery. So far, both Republicans and Democrats agree that defaulting would be bad for the country… and both parties are digging in and showing themselves willing to let it happen if their political calculus shows it’ll hurt the “other side” more than it hurts them. Rarely has putting party before country been more blatant… but this is the 2020s and it seems to be the cool thing to do now.

The real bottom line is this: The “debt ceiling” is an entirely self-inflicted constraint. It’s not a force of nature. With a current debt of $31 Trillion, it’s probably time we do away with the fiction that either party is the one concerned with responsible spending. If we can’t manage to get past that tribal, binary method of framing issues, well, we probably deserve whatever painful, but entirely avoidable consequences are preparing to jump up and bite us collectively in the ass.