David Graeber studied 5,000 years of debt: real dirty secret is that if the deficit ever completely went away, it would cause a major catastrophe

By Jay Kernis, CNN

Answering today’s OFF-SET questions is David Graeber, who teaches anthropology at Goldsmiths College, University of London. He is the author of “Towards an Anthropological Theory of Value,” “Lost People,” and “Possibilities: Essays on Hierarchy, Rebellion and Desire.”

His new book is entitled “Debt: The First 5,000 Years,” and in it, Graeber indeed examines the historical significance of debt, the struggle between rich and poor, and the moral implications inherent in our ideas about credit and debt.

The U.S. Treasury Department last Friday reiterated its Aug. 2 deadline for raising the debt ceiling, and urged Congress "to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner.”  The White House wants a deal by July 22. If the debt ceiling isn't raised, the Treasury would not be able to pay nearly half of the 80 million payments it needs to make every month, according to an estimate by budget experts at the Bipartisan Policy Center.

How did the United States get into this situation?

Because the Republicans are engaged in one of the most extraordinary campaigns of political recklessness in recent memory.

One has to presume that Republicans are perfectly well aware that the US debt is not really a crisis, and that they're not really going to force into default just to be able to hack further away at social programs. That's what they seem to be telling Wall Street, anyway. But it's almost unimaginably irresponsible. If you play chicken, there is always the chance that you'll go off a cliff.

So if Congress doesn’t raise the $14.3 trillion debt ceiling in a few weeks, and the U.S. defaults on its debt for the first time in history, what level of confusion, calamity and crisis might this country face?

 It's really hard to say. Probably in the short run, not that much – there are always expedients the federal government can use to stop the gap temporarily, and the business community will put enormous pressure on the Republicans to cut it out.

The danger would be the effects overseas – would it accelerate movements to abandon the use of US treasury bonds as international reserve currency. Since 1971, when Nixon went off the gold standard, the dollar has essentially played the role gold used to play as the bedrock of the world banking system.

Russia has been arguing the world should move away from the system for years, China occasionally at least pretends to toy with it, and Dominique Strauss-Kahn was apparently working on an alternative system as well before.... well, you know.

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