On This Week with Christiane Amanpour, Jake Tapper interviews Obama economic advisor Austan Goolsbee about the upcoming vote on the national debt ceiling, and wonders what will happen if the new Republican extremists successfully keep it from being approved.
TAPPER: There's a big crisis point coming up potentially, and that is the nation is only about $400 billion away right now from reaching the $14.3 trillion debt ceiling, meaning this spring Congress will have to vote on whether or not to lift that ceiling. A number of Republicans, especially Tea Party candidates, have said that they will not vote to do so.
What economic effects would people see immediately if Congress does not raise the debt ceiling? And does the administration have a contingency plan if that happens?
GOOLSBEE: Well, look, it pains me that we would even be talking about this. This is not -- this is not a game. You know, the debt ceiling is not -- is not something to toy with. That's the -- the -- if we hit the debt ceiling, that's the -- essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008.
As I say, that's not a game. I don't see why anybody's talking about playing chicken with the -- with the debt ceiling.
If -- if we get to the point where you've damaged the full faith and credit of the United States, that would -- that would be the first default in history caused purely by insanity. I mean, that would -- there would be no reason for us to default, other than that would be some kind of game.
As our Jon Perr points out, Republican support for raising the debt ceiling ended with Obama's election!
I mean, I hope we don't -- we shouldn't even be discussing that. People will get the wrong idea. The United States is -- is -- is not in danger of default. We -- we do not have -- we do not have problems such as that. This would be lumping us in with a series of countries through history that I don't think we would want to be lumped in with.
TAPPER: Well, Republicans are talking about -- some Republicans are talking about making an issue out of the debt ceiling to force the administration and the Congress to cut spending. President Obama himself has talked about the need to tackle the debt and the deficit and the need to cut spending. Where specifically does President Obama want to cut spending? Where is there fat to cut from the budget?
GOOLSBEE: Well, you know, the -- as you know, the president's going to release his budget. He's -- we're going to have -- we are going to have to make in the medium run a series of tough choices, and the president's not afraid to do that, and I think you will see in his budget that he's willing to...[do that].
Of course, Jake Tapper doesn't consider the idea that deficit fears are overblown even worth discussing. And Goolsbee assures him that Obama is ready to make "tough choices." Get ready for the run against Social Security!