James Hamilton says if you or I were to say our plan is to spend more than we earn, but not run up any more debt, people would say we're crazy.
"That's exactly what Congress is doing," said Hamilton, an economics professor at UCSD. "They've already passed legislation that they're going to spend more than they take in as taxes, and they're pretending they're not going to have to borrow any more to do that."
Hamilton says the real problem here, which you won't hear anybody talking about, is that the government separates legislation on spending, on taxes and on the debt as if they're three different decisions.
"They're really not," says Hamilton. "What we're facing now is a conflict between those three, and something's got to give. And it's not totally clear how that's going to be resolved."
The Republicans vow not to raise the debt ceiling without significant spending cuts.
As for the government defaulting on its debt if the ceiling is not raised on August 2nd, Hamilton says forget that date.
"There are lots of accounting games and gimmicks that the government can use and is using to put this off."
The hard date is a bargaining chip to counter the Republicans' ‘no deal without significant cuts' stance.
"There isn't a hard date here because there is a mushy boundary and it's not clear exactly when you run out of games, and that makes it a more dangerous sort of bargain to try to push to the brink."
The game right now is about politics, not about the debt.
Hamilton thinks both sides are posturing and that they will eventually negotiate a solution that does involve raising the debt ceiling.
The time to worry is when you have trouble just meeting the interest payments on your debt. That's when you're heading for a crisis, and we're nowhere near that.