If we don't raise the debt ceiling, interest rates will sky-rocket, which could cause increasing foreclosures on homes. In addition, international confidence in our economy would decrease, causing less interest by foreign investors in our economy. Less economic investment from abroad means companies will continue to decline, if not go bankrupt. Failing to raise the debt limit is foolish and irresponsible. Republicans and Democrats have both understood this and thus raised the ceiling many times; until the Tea Party wing of the Republican party showed up to throw a ill-informed wrench into a very serious and critical issue. We shouldn't be using this debt limit as a bargaining chip for spending cuts. Those discussions can be hashed out over the 2012 budget; once we get past this irresponsible game of "Russian Roulette" with the debt limit.
I fully agree that we need to pay down our debt and balance the budget like President Clinton did in the 1990s but that shouldn't come at the cost of the middle-class alone. It's the middle class that has already taken the biggest hit from this Great Recession. They are the ones who've lost the jobs. They are the ones who've lost their homes. They are the ones who've lost their savings. Democrats are simply asking for shared sacrifice.
So, if Democrats are willing to adjust the cost of Medicare and Social Security then it's disingenuous for Republicans to refuse to talk about tax hikes for those making over $500,000 a year. They've already had it good with tax cuts since Bush took office in 2000!! They walked away from negotiations because Democrats and Obama wanted to talk about targeted tax hikes on those who can most afford and who have, so far, avoided much of a hit from this recession. The Republicans are behaving like the kid who took his ball and went home.
The expression comes from the playground where one kid, the one who owns the soccer ball or basket ball, doesn't get his way in the game. If he doesn't get his way then he gets mad and punishes those who are unwilling to accept his mandate. He does this my taking his ball and going home thus ending the game and any fun the participants were having. I know what you Republicans are thinking; why believe a liberal? Then maybe you'll listen to former hedge fund manager and Wall-Street guru, Jim Cramer on the matter (his comments are 3 minutes and 30 seconds into the clip):