The word "unthinkable" comes up a lot when economists talk about what happens if Congress refuses to raise the debt ceiling.
The debt ceiling is a limit on federal borrowing that Congress has raised 74 times since 1962, including seven times while George W. Bush was president.
We've always assumed that even the most intransigent Republican would be unwilling to send IOUs to soldiers on the battlefield or people who live on Social Security, much less rattle financial markets or risk the country's creditworthiness.
But we could be wrong. The suspense won't last much longer.
Without congressional action, the country goes into default Aug. 2, and congressional leaders need some time before then to put any agreement into bill form and round up votes.
President Barack Obama is supposed to meet again today with leaders from both parties to hammer out a deal for trimming the debt in return for allowing the government to keep issuing Treasury notes and paying its bills.
Obama surprised everyone by pushing for a $4 trillion deficit-reduction plan, bigger than Republicans had sought.
Whether it's $2 trillion or $4 trillion, cuts in spending should be balanced by increases in taxes.
By almost any measure, the federal government is bringing in too little money. The federal tax burden is the lowest in 60 years — 14.8 percent of gross domestic product. The average tax burden since World War II has been 18.5 percent of GDP.
While corporate tax rates are high compared to those of other countries, the array of tax breaks and loopholes available to U.S. corporations reduces their actual tax burden to one of the developed world's lowest.
U.S. corporate tax revenue as a percent of GDP is 1.8 percent, lowest among 31 nations in the Organization for Economic Cooperation and Development.
Deficit-reduction packages under presidents Ronald Reagan and Bill Clinton included both spending cuts and tax increases. But today's Republicans checked their brains at the door when they signed no-tax pledges and refuse to even talk about increasing revenue.
The federal surplus of 2001 melted into a black hole of debt because a Republican Congress and president cut taxes and decided to pay for two wars and a Medicare prescription drug benefit with borrowed money.
By comparison, debt to pay for Obama's spending and stimulus is a small factor in projected deficits. Letting the Bush tax cuts expire next year would pretty much erase the short-term deficit, a good start on dealing with the longer-term deficits fueled by the cost of aging Baby Boomers' health care and Social Security.
Senate Minority Leader Mitch McConnell and others in the GOP repeat the party orthodoxy, that any tax increase snuffs out job creation. But there are plenty of examples of when taxes were much higher and unemployment much lower that prove them wrong.
We'd hate to think that McConnell and his party want to subject Americans to more economic pain in hopes that voters will blame Obama in 2012. That would be a risky strategy. If Congress drives the economy off a cliff and wounds U.S. standing, by refusing to do something it's done 74 times in the last 50 years, there will be blame enough for all.
As investor Warren Buffet told CNBC last week, "We don't need to tell the rest of the world that anytime people in Congress start throwing a tantrum we're not going to pay our bills on time."