We have a debt crisis, not a debt ceiling crisis. Raising the debt ceiling without substantial structural reform would be worse than hitting the debt ceiling. The ratings agencies have stated that downgrades are coming unless credible reform happens this year. Which is a laughably belated admission that it's absurd to rate AAA a country running serial deficits of 10% of GDP.
UPDATE: Kevin Williamson agrees, predicting fire and brimstone if the U.S. is downgraded... but it's not the debt ceiling that's the problem:
The thing that has not been sufficiently understood, I think, is this: The United States is not on a downgrade watch because the markets fear we won’t raise the debt ceiling in time to avoid a default; the United States is on a downgrade watch because the markets believe the debt-ceiling debate presents the last real opportunity for the government to enact a meaningful fiscal-reform program before it is well and truly too late to avoid a national crisis. The credit agencies, wisely or not, aren’t worried about the short-term political fight leading to an immediate default, but about the near- to medium-term fiscal situation, which is plainly unsustainable.
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