If the Tea Party gets what some of its members seem to openly hope for -- a default -- most economists suggest that we will be facing a massive global economic stock sell-off and a second global recession, just as many economies are showing signs of revival. Expect nothing less than near panic in the global financial order.
The former chief economist of the International Monetary Fund, Simon Johnson, describes the repeated face-off over the debt ceiling and prospects for default as an act of "collective insanity," noting that such irresponsibility in 2011, "put more pressure on European sovereign debt at an inopportune moment, pushing up yields across the troubled euro zone (including, but not limited to Greece)." Consequently, not just America's recovery suffered. The risk substantially increased that Europe will now face a "lost decade" similar to that suffered by Japan with little or no economic growth.
But shutting down the government in Washington and risking a default around the debt ceiling should not really be called "collective insanity." Granted, I take no issue with the "insanity" part of that formulation, only the suggestion that this is "collective" madness. The American public overwhelmingly opposes shutting down the government or risking default. A Quinnipiac poll found that only 22 percent of Americans supported such brinkmanship around either a government shutdown or the debt ceiling, and that number will likely only shrink further as the public realizes the stupidity of such an approach.
The real question is how the Republican Party, the American public, and indeed the world will respond to break the stranglehold on collective interests and civics of a belligerent, destructive minority within a minority. Just as William Buckley and the National Review led the charge to shun the paranoid ravings of the John Birch Society in the 1960s, the time has now come for the Republican Party to reclaim its soul.