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– Government Shutdown: The budgetary implications of failing to increase the debt ceiling would result in “the immediate cessation of more than 40 percent of all federal government activities (excluding only interest payments on the national debt), including Social Security, military operations in Iraq and Afghanistan, homeland security, Medicare, and unemployment insurance.”

– Default on the National Debt: During the previous GOP-induced debt ceiling crises in 1995-96, the Treasury Department used extraordinary measures to avoid defaulting on the national debt. Deutsche Bank analysts believe that those same measures would be less effective today and the government would “not be able to stave off a government shutdown (or possible suspension of bond payments) for long.”

– Worldwide Financial Panic: “Refusing to raise the debt ceiling would recklessly disrupt the sale and purchase of new Treasury bonds, and could potentially cause a run on outstanding Treasurys as well, as investors sought other investments. This could have catastrophic consequences for our economy as well as the economic stability of the rest of the world.”

– Economic Catastrophe: Suddenly pulling trillions of dollars in public spending out of the economy, as well as inducing a worldwide financial panic and a run on U.S. sovereign debt would “almost certainly result in a severe drop in economic growth and employment” and could potentially “take us into a Second Great Depression.”

– Actually Increase Long-Term Deficits and Debt: By undermining the credit worthiness of U.S. government, annual borrowing costs would skyrocket. A mere doubling of the current rate the government pays for a 10-year Treasury note would nearly double the cost of annual interest payments on the national debt to approximately $600 billion—increasing long-term deficits and fueling even more high-cost borrowing. If investors begin pricing a “fear premium” into U.S. debt, costs could be driven even higher.

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...this vote would pose an early purity test for newly-elected tea party-backed members of Congress. With Mississippi Governor Haley Barbour also saying today that a government shutdown is “very likely”, given the GOP won control of the House of Representatives. It appears that the GOP is more interested in fealty to its tea party base than in seriously governing the country — even if that means risking an almost unprecedented economic calamity and needlessly inflicting untold harm on the nation’s prospects for a return to long-term prosperity.

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they're so tired of politics as usual that they're willing to try something untested and extreme.

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