Ali Velshi did an excellent explainer on how House Republicans are planning to construct a contingency plan that will force the White House to accept massive spending cuts, and noted that Janet Yellin warned the House how critical it was to raise the ceiling,

"Now, if Republicans decide not to lift the debt ceiling, it will undoubtedly start a fiscal shutdown that will have huge consequences for the American people, and possibly people all over the world," he said.

He talked about how the debt ceiling historically works -- and how no, it can't be compared to how you handle household debt. He explained how Treasury bonds work, and how defaulting on them will affect the U.S. economy.

"If Republicans succeed in that effort, the government would have to do what an individual or company would have to do: reprioritize who gets paid first. And in the case of the U.S. government, interest on those bonds has to be paid first. Because if a payment to a bond holder is missed, the credit rating of the entire U.S. could drop, and the interest rate for borrowing any more money goes up.

"And that could cause inflation as costs get more expensive. It could cause a recession, or make the one that we're headed into possibly worse. The worst-case scenario, however, is that it causes both inflation and a recession, which is a very difficult position to get out of.

"The idea that a government, like a household, shouldn't spend more than it takes in is interesting but it's incomplete, because a household is made up of people with a limited time to work. There's lots of time to generate income and lots of time to pay it off. It's not that government should spend without any regard to how and when the debt will be paid, it's just that the calculus for a mature strong economy cannot be fairly compared to you and your financial obligations."

He said we've never failed to get the debt ceiling raised, that people still shrug it off as a game of chicken.

"And I hope you're right. But if you're wrong, because if you underestimate the resolve of those Republicans who are prepared to burn the house down, we could be headed for some real trouble. What's different about this time is that as well as inflation is coming down, it's still three times as high as we would like it to be, and that's okay. Because the Fed can keep raising interest rates to fight inflation. Except there are real fears, that if all the effort the Fed is putting into fighting inflation could have the effect of slowing down the economy too much, triggering a recession."

"That is a real possibility. And here's the problem with having inflation and a recession at the same time. You fight inflation by raising interest rates and discouraging people from spending. You fight recession by lowering interest rates and encouraging people to spend. But you can't raise interest rates and lower interest rates at the same time. So if we get ourselves into that position, we could be in for a very difficult few years economically.

"Years in which when interest rates are high, economic growth is low, home prices collapse, millions of jobs are lost, wages drop, and your 401k suffers. That's what Republicans who threaten not to raise the debt ceiling are really playing with: not their political futures as much as your and the country's very prosperity."