The Real Debt Ceiling : What will happen in a decade or so, when default becomes inevitable?

The National Review reports:

Refusal to raise the debt ceiling will never necessitate default — unless the interest payments we owe exceed the revenue we have. That is not even close to being the case — net interest payments have been running around 7 percent of revenue lately. But if current trends continue, that number will change. In 2010 Moody’s, working from Congressional Budget Office projections described by one analyst as “wildly optimistic,” calculated that policies being pushed by the Obama administration could drive interest payments as high as 20 percent of federal revenue by 2020. The CBO’s polite-nod-to-reality “alternative fiscal scenario” projects that sustained deficits will mean that interest payments will cost us an additional 1 percent of GDP in ten short years. And those are far from worst-case, Chicken Little scenarios. A return to the interest rates that prevailed as recently as the 1980s would turn our federal budget upside-down practically overnight, with interest expenses far outpacing tax revenue. When debt-service costs exceed revenue, default is a practical inevitability.

An article well worth your time.