MOTHER JONES: On August 2 (or maybe a few weeks later), the US government will reach the legal limit on how much money it can borrow—a.k.a., the “debt ceiling.” It’s currently set at $14.3 trillion. The government borrows money to pay for everything from tax refunds to wars and veterans’ benefits, not to mention repaying our creditors, which include China, Japan, the United Kingdom, state and local governments, pension funds, and investors in America and around the world.A debt ceiling has existed since 1917. Before that, Congress had to provide its stamp of approval each time the Treasury Department wanted to sell US debt to raise money. Putting a borrowing limit in place gave the federal government more flexibility to fill its coffers without going to Congress over and over. Lawmakers in Congress have raised the debt ceiling on many occasions, including eight times in the past decade, and Treasury Secretary Tim Geithner has said that failing to raise it and allowing the US default “would shake the basic foundation of the entire global financial system.”
What Happens If Congress Doesn’t Raise the Debt Limit? In a word: Catastrophe. At least that’s what Geithner told 
Congress in January. In an ominous letter, he wrote that a US default would wreak havoc on the domestic economy and essentially result in a hefty tax on all Americans. That’s economics 101. If you default on, say, your mortgage or car payment, creditors consider you a bigger risk and as a result, it’ll cost more for you to take out loans in the future. The same idea applies here, too, except that everyone—consumers, cities, states, corporations, and the government—will pay higher borrowing costs if the federal government defaults, Geithner says. Not to mention that the government would run out of cash to pay the salaries of federal employees and members of the military, veterans benefits, Social Security and Medicare, unemployment benefits to states, individual and corporate tax refunds, Medicaid payments, and on and on. MORE
RELATED: Obama is dealing with radical hostage-takers who do not share his sense of responsibility. So when he asks these questions—Will the GOP truly prevent young adults from getting college loans so mega-profit-making oil companies can keep their special tax breaks? Will they really push the nation into a financial crisis to score an ideological point about supposedly out-of-control spending?—is Obama underestimating the opposition? Or is he posing rhetorical queries designed to position himself (especially in the eyes of independent voters) as the reasonable fellow in this dust-up? MORE
RELATED: Amid fears the United States risks default if lawmakers don’t raise the debt ceiling on time, some are suggesting President Obama could save the day by big-footing Congress. How? By invoking the Constitution and directing Treasury Secretary Tim Geithner to keep borrowing even if it means going past the statutory borrowing limit. Really? They say default — and by extension, the debt limit — violates the 14th Amendment. The amendment states: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” MORE
RONALD REAGAN: The full consequence of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass the legislation before the Congress adjourns. MORE