I will give Rep. Ron Paul (R-Texas) the respect of treating him as a
serious candidate for the presidency. Paul is the chairman of an
important monetary policy committee in the House and potential
president. If his views expressed in The Hill and elsewhere calling for
rejection of any debt-ceiling increase were the policy of any president
or either house of Congress, he would cause a stock- and bond-market
crash and possibly a global depression.
A U.S. default would mean the destruction of the good faith and credit of the most important economic nation in the world, with indescribably catastrophic consequences.
Under Paul's position, there would be only two ways to avoid a default. The first would be the largest and most gigantic tax increase in world history. The second would be the most radical and extreme budget cuts in American history. Either would be imposed in a matter of days, when almost 16 percent of the nation is in search of jobs, when the world economy remains vulnerable and weak.
I like and respect Ron Paul. I have always tried to be fair to him, more so than most mainstream columnists. But his view that the debt ceiling should not be increased is way off in economic outer space. If he were president and pursued this policy, he would cause a global economic crash.