No Dealing On The Debt Ceiling, Part 18

Congressional Budget Office director Doug Elmendorf warned that even a brief, "technical" default could add hundreds of billions to the national debt in higher borrowing costs.

"It is a dangerous gamble because any government that has borrowed as much as ours has borrowed and will need to borrow as much as ours will need to borrow cannot take the views of its creditors lightly," CBO Director Doug Elmendorf told a roomful of reporters at a breakfast roundtable hosted by the Christian Science Monitor. "Even a small increase in the perceived risk of Treasuries would be very expensive for the countries."

Ironically, Elmendorf noted that one of the potential consequences of even a brief period of default would be higher federal debt, triggered by a spike in interest rates and, thus, higher interest payments on federally issued debt.

"If Treasury rates moved up by just 10 basis points over the next decade, that would add $130 billion to interest payments over the decade," Elmendorf said. A basis point is one-one hundreth of one percent. Thus, according to Elmendorf, each 0.1 percent increase in interest rates on U.S. Treasuries would amount to a significant increase in U.S. debt.

And again, let's not forget that this would add billions in additional costs for US consumers, too.  Credit card rates, adjustable rate mortgages, car loans, any borrowing would go up as interest rates would rise, causing even further damage to the economy.

Of course, that's what the GOP wants to do, and then blame it on Obama.