Eric Posner, "Three Ways Obama Could Raise the Debt Ceiling On His Own"
What should the president do if Congress refuses to raise the debt limit? The question is like asking what the president should do if Congress orders him to drop a nuclear bomb on Manhattan. He should act in the public interest and accept the consequences. The legalistic argle-bargle necessary to take him from A to B is almost beside the point. But perhaps it is a worthwhile exercise to imagine what the law would say.
Imagine, then, that Congress does not raise the debt limit. Sometime later this month, it becomes impossible for the Treasury to pay all U.S. obligations—including interest on the national debt, payments to Social Security and Medicare recipients, and salaries and pensions to government employees such as soldiers and food inspectors. Tax and other revenues coming in will fall short of payments that must go out. If the president does not violate the debt limit and borrow more, he will have to choose among these obligations, paying some and defaulting on others.
It is hard to imagine such a state of affairs lasting very long (or even getting started), but imagine we must. If the president stops paying interest on the debt, financial markets could freeze up, as they did in 2008. Banks would shut down, people would be thrown out of work. If the president instead stops making Social Security and Medicare payments, or stops paying the salaries of soldiers, a huge amount of hardship and even danger would result. Whatever he chooses, the United States would be thrown into its most dangerous crisis since the Depression. By contrast, if he borrows money above the debt limit, then he can continue to make payments and avoid these bad outcomes.