An excerpt: "But who cares if the dollar value of “Gross Domestic Product” goes down? If prices fall even more, then Americans’ standard of living goes up. For example, if the Tea Party activists actually held Republicans’ feet to the fire and Uncle Sam didn’t raise the debt ceiling, then the government would have to slash $750 billion or so from this year’s spending to avoid default on the existing debt".
"That would mean that there was a sudden loss of $750 billion in income to various people in the economy. A large part of it would probably be made up by income generated in the private sector, as the government’s deficit disappeared and people expected lower future tax burdens. But even if it didn’t, so what? The quantity of skilled workers, raw materials, and machine tools wouldn’t decrease just because Uncle Sam started living within his means. After prices adjusted downward, Americans would find they could buy more with their lower incomes".