On August 2nd

You don't want this baby seal to be clubbed to death, do you?The brouhaha over August 2nd as a firm deadline to raise the nation's debt ceiling has at least some element of Washington Monument Syndrome.  From Wikipedia:

Washington Monument Syndrome, also called the "Mount Rushmore Syndrome", is the name of a political tactic allegedly used by government agencies when faced with reductions in the rate of projected increases in budget or actual budget cuts. The most visible and most appreciated service that is provided by that entity is the first to be put on the chopping block.  The name derives from the National Park Service's alleged habit of saying that any cuts would lead to an immediate closure of the wildly popular Washington Monument.  The Washington Monument Syndrome emerged as a euphemism for cutting the most visible services after George Hartzog, the seventh National Parks Director, closed popular national parks like the Washington Monument and the Grand Canyon for two days a week in 1969. The intent of the closures may not have been to get people to complain to Congress, but the effect was that Congress received complaints, Hartzog was fired, and the funding was restored.

Here are some more examples of the phenomenon in ascending order of ridiculousness:

The Zakim Bridge from Cambridge to Boston is one of the Boston's most popular landmarks.  In April 2009, the MBTA faced budget cuts and billions in debt still lingering from the Big Dig and decided to turn off the bridge's famous lights, which would save a whopping 1/30,000 of the organization's debt.  The ignorant public responded to this stunt by demanding that the MBTA's budget be raised so the lights could be turned back on.  

Lifeguards and public library services for children are often the first thing to go when budgets get tight.  Why do you think that is?

The Save Toby project is not related to government at all, but it is an example of a similar phenomenon in the private sphere.  In 2005, the proprietors of savetoby.com posted pictures of a cute rabbit that they claimed to have found injured outside their home.  Then they said that if they didn't receive 50,000 dollars to take care of it, they would be forced to eat Toby.  The website included a variety of recipes for rabbit and regular updates and messages that the proprietors didn't want to eat Toby but would be forced to if they couldn't raise $50,000.  The project managed to raise $24,000 from animal rights activists and other concerned netizens (which then went towards beer, solo cups, and ping pong balls). 

On August 2nd, the government will default on its debt unless the debt ceiling is raised or some benefit goes unpaid; i.e. there are no accounting tricks left.  Some Democrats have been calling for more debt in order to save government jobs at a time when unemployment threatens to enter the realm of double-digits.  Some Republicans have been calling for no more debt since enough is enough already and such.  At some point in time, this debate transcends basic economics and comes down to values.  Do we value the United States as an economic wasteland where the government is no longer able to borrow money due to its Aa1 credit rating (I guess banks will lend to other countries's governments instead?) Or do we value the United States as an economic wasteland where our debt takes another five years to pay down and burdens our children?  (Is now suddenly the time to stand on principle?)  Polls show Republicans will be blamed no matter what happens.

August 2nd in itself is not a big deal.  The United States will remain the default economic power despite its err... ummm... default.  Neither the Euro nor the Yen will become the main currency in which debt is issued.  The government will probably just print more money to fix the problem because it can and there's nothing much else to do that doesn't necessarily entail making unprecedented progress to resolve intractable political problems.  Speaking of intractable political problems, here's my multifaceted solution: (1) reform the tax code - have a consumption-based tax with a large standard deduction for individuals and eliminate the advantages of being able to afford an excellent team of tax lawyers; (2) don't cut any more low-paying government jobs now but maybe set a trigger of say when unemployment hits 6% and announce this so workers can start looking now; (3) end farm subsidies - they get abused, and big food causes health problems; (4) end the drug war; (5) let companies that contribute nothing to society slowly wither away and die despite their size and in accordance with the whims of the market; and (6) end the fucking wars.