With the government shutdown in its second week and the federal government only two weeks away from hitting its self-imposed debt ceiling, the House Republicans have decided to raise the stakes.
What started as a gambit to derail Obamacare by refusing to pass a budget that would fund it (and has now led to the shutdown of most federal government operations) is about to morph into a refusal to increase the debt ceiling unless the House Republican's budgetary priorities are met.
This isn't partisan gamesmanship as usual. The threat to default on the government's debt is something that we all have a stake in—a really big stake. If the government were to default, a disaster will unfold that will affect every household in America, perhaps permanently. So this time really is different.
Let me explain.
The debt securities that the federal government issues to raise money to fund its budget deficits (so-called Treasurys) are the foundation of our banking and monetary systems. Someone's debt (in this case, the federal government's) is someone else's asset (in this case, our banks, our money market funds, and each of us individually, through the private pension systems in which we may participate and through our rights to Social Security).
That is, the largest owners of Treasurys are the Social Security trust fund, our private pension plans, our banks and the money market funds. So their ability to give us our deposited money back or to pay our pensions on time depends on the government's ability and willingness to pay interest and principal on the Treasurys that banks, money market funds, private pension plans and Social Security hold.
(Read more: Boehner: No 'lines in the sand' on debt limit)