Yes, indeed it is totally political on both sides. Since the Democrats are in the White House, the Republicans are happy to create a bit of economic chaos so long as the Democrats get the blame. If the Republicans were in the White House, the Democrats would do the same, but probably less effectively, because the Democrats seem have a harder time controlling their members. There is an election coming up! Ever since the U.S. went off the gold standard it has been politically expedient to tax indirectly through inflation rather than directly through the income tax. (The average person does not understand the link between deficit spending and inflation, nor the link between inflation and interest rates.) This pattern will continue, and inflation will increase still more until it reaches high single to low double digits, at which point inflation becomes highly noticeable and it becomes increasingly difficult to cover it up by tinkering with the method of computing the rate. Then, either interest rates must rise, or more subtle ways of stealing individual wealth must be exploited. Expect to see some tax changes that will be opaque to the typical citizen, but nevertheless will increase revenues. As I write this there is a move afoot aimed at reducing benefits to future recipients of Social Security and Medicare. This, in the case of Social Security, will be done by the back door, since by law the trust fund can be used for no other purpose than Social Security. But there is no money in the Treasury to redeem trust fund bonds. According to the Social Security administration actuaries, it would only require a two cent on the dollar increase in the contribution rate to make the system sound into the foreseeable future. (It's a 2% increase relative to earnings but a 16% increase relative to the current 12.5 cents per dollar rate.) So the obvious question is why don't we just get on with it? And the answer to that question is that even with a higher contribution rate, the trust will still need to be redeeming bonds acquired during many years of surplus contributions, and money to redeem those bonds will have to be borrowed by the Treasury; thus the move to reduce future benefits, on top of a likely contribution rate increase. By combining a benefit reduction with an increase in contribution rate, the rate at which the trust bonds have to be redeemed can be kept to a level that is more manageable for the Treasury. But this solution is diabolical because it accomplishes indirectly, and legally, the exact equivalent of just reaching directly into the trust fund and using, illegally, the revenue for something entirely unrelated to Social Security. Here's why. If there were no reduction in future benefits, the actuaries say the system would be fine with just a two cent increase in contributions. But the actuaries assume that the Treasury will redeem the bonds in the Trust as needed. Thus any reduction in benefits on top of a higher contribution rate represents an indirect diversion of Social Security assets to other government programs, as it will slow trust redemptions beyond the rate deemed necessary by the actuaries to maintain current benefit levels. Something completely outside the intention of congress when it set aside the Trust and "protected" it from use other then for Social Security. This is truly diabolical. Entitlements are called entitlements for a reason. This is your money set aside for your use, if needed, and to be shared with other citizens according to their needs. These entitlements were never intended to be used to support endless war, a giant Homeland Department, a phoney war on drugs, a Rio Grande fence, corporate welfare, or any other purpose not related to Social Security or Medicare. Sadly, none of this nonsense would be needed if the United States were to bring its medical and military spending down to fall in line with that of other developed countries.
All of the talk of default is pure BS and political posturing. Even if the debt ceiling is not raised (as it should NOT be), tax revenues cover debt service by 12:1. Without a raise in the debt ceiling certain social programs and/or defense will have to be cut... that's why all the lies and misdirection about "default". And to think... it's BERNIE who is in jail.
You're right about not defaulting. Problem is, all that pork spending in Defense, Medicare (yes, Medicare), Medicaid, SS is what has kept this joke of an economy afloat for decades. If they simply cap the ceiling and pay off maturing debt with tax revenues, the economy and stock market would crash 4-5 times worse than 2008. On that point, it's not fear-mongering. Deindustrialization left a gaping hole in the labor market that was filled by the deficit - phony demand and phony jobs. If Congress maintains the debt ceiling, the nations credit card will max out in August. Then all hell will break loose. Truth is, the collapse is inevitable, no matter which way you slice it. Either we do Greece, run the game for another few years, then the bond vigilantes crush us. Or, the United States goes into a structured default, which would have the exact same effect. Or, the ceiling is maintained and we do it in August. Much better to let it collapse now than later. But it will be horrendous.