I found this Debt Ceiling Explainer at MoJo in case anyone would like to take a look.

(They've been updating over the weekend, which is nice.)

What's Happening With the Debt Ceiling Explained

—By the Mother Jones reporting staff
| Sat Jul. 9, 2011 10:45 PM PDT

Welcome to our debt ceiling explainer. For a primer on the issue, read on. For the latest news, click here.

The Basics: On August 2 (or maybe a few weeks later), the US government will reach the legal limit on how much money it can borrow—a.k.a., the "debt ceiling." It's currently set at $14.3 trillion. The government borrows money to pay for everything from tax refunds to wars and veterans' benefits, not to mention repaying our creditors, which include China, Japan, the United Kingdom, state and local governments, pension funds, and investors in America and around the world.

A debt ceiling has existed since 1917. Before that, Congress had to provide its stamp of approval each time the Treasury Department wanted to sell US debt to raise money. (Here's a wonky history of the debt ceiling , courtesy of the Congressional Research Service.) Putting a borrowing limit in place gave the federal government more flexibility to fill its coffers without going to Congress over and over. Lawmakers in Congress have raised the debt ceiling on many occasions, including eight times in the past decade, and Treasury Secretary Tim Geithner has said that failing to raise it and allowing the US default "would shake the basic foundation of the entire global financial system."

What Happens If Congress Doesn't Raise the Debt Limit? In a word: Catastrophe.

At least that's what Geithner told Congress in January. In an ominous letter, he wrote that a US default would wreak havoc on the domestic economy and essentially result in a hefty tax on all Americans.

http://motherjones.com/mojo/2011/06/whats-happening-debt-ceiling-explained#37

I hadn't seen this before. Did Ron Paul find a reasonable short term solution?

The basic story is that the Fed has bought roughly $1.6 trillion in government bonds through its various quantitative easing programs over the last two and a half years. This money is part of the $14.3 trillion debt that is subject to the debt ceiling. However, the Fed is an agency of the government. Its assets are in fact assets of the government.... he bonds held by the Fed are literally money that the government owes to itself.

Unlike the debt held by Social Security, the debt held by the Fed is not tied to any specific obligations... here is no direct loss of income to anyone associated with the Fed’s destruction of its bonds. This means that if Congress told the Fed to burn the bonds, it would in effect just be destroying a liability that the government had to itself, but it would still reduce the debt subject to the debt ceiling by $1.6 trillion. This would buy the country considerable breathing room before the debt ceiling had to be raised again. President Obama and the Republican congressional leadership could have close to two years to talk about potential spending cuts or tax increases. Maybe they could even talk a little about jobs.

to make abstract problems a little more easily accessible but without dumbing them down. :)

Clean reporting without spin. I bookmarked the article for future reference.

We certainly live in interesting times.

For all my criticism of Obama, I get it. The Republicans are determined to drive us over the cliff, and he's using every tool in his arsenal to try to prevent it. I can't say I wouldn't do the same in his position. I don't think we've ever had this level of opposition to a president before. Newt is as close as we've come that I can think of. The only encouragement I can take is that Gingrich's strategy backfired badly. Maybe they're inadvertently setting themselves up for a massive House shakup and a continued Democratic majority in the Senate in 2012. I hope so. I think that may be our only hope.