<http://www.nypost.com/> clip_image001Updated: Mon., Apr. 25, 2011, 9:01 AM Doomsday on debt? By CHARLES GASPARINO Last Updated: 9:01 AM, April 25, 2011 Posted: 11:08 PM, April 24, 2011 Some of the best minds on Wall Street are obsessing about the theoretical chance that the country might default on its debt if Congress and the president somehow fail to reach an agreement and raise the so-called debt ceiling. Now, there's plenty to worry about when it comes to the economy -- from rising gas prices and the threat of inflation to the ever-looming possibility that the anemic recovery might peter out. Make no mistake, default would be terrible. It wouldn't just make us a basket case like Greece or Portugal; it would probably lead to a global financial collapse that would make the 2008 crisis seem trivial. But no serious politician in either party is talking about letting the country default on its debt -- even if they don't reach an agreement on raising the debt ceiling by mid-May, when our borrowing will hit the current limit. Yes, even if Republicans play hardball and refuse to let the country borrow more unless President Obama agrees to more budget cuts, things don't go boom. A combination of tax revenues on hand, savings from furloughing government workers and a few other measures would certainly allow the richest country in the world to meet its obligations. So we ain't Greece just yet. Yet much of Wall Street is treating imminent default as a serious threat to the country's, if not the world's, financial well being. In recent weeks, firms like megabank JPMorgan have been scrambling to issue reports predicting apocalypse unless Congress allows the country to borrow ourselves into oblivion. Somehow, we're supposed to see unbridled spending as the responsible course. In fact, raising the debt cap to borrow new money to pay off old debt without making other cuts is exactly what led Greece, Portugal and maybe soon Spain and Italy into financial meltdown -- as it did to New York City in the 1970s. Yet reports like the House of Morgan's ominously titled "The Domino Effect of a US Treasury Technical Default" are being taken seriously among financial analysts and in the financial media -- without a necessary discussion of the big banks' huge vested interest in the Washington status quo. Start with the politics. Morgan boss Jamie Dimon is a committed Democrat. After haggling with the administration over financial reform, he's now back in the president's good graces and has even been invited back to the White House for a briefing. He's also a pal of Treasury Secretary Tim Geithner, who's leading Obama's efforts to get the debt ceiling raised without any of the spending cuts Republicans have demanded. Oh, and Morgan's former chief lobbyist, Bill Daley, is now Obama's chief of staff. Over at Goldman Sachs, CEO Lloyd Blankfein and President Gary Cohn are also well known progressives and past supporters of the president -- and Goldman's economists may even surpass Morgan's in their advocacy of Obamanomics. Just recently, Goldman economists told us that if Republicans forced the president to accept a mere $61 billion in budget cuts, the country might slip back into recession. As one long-time Wall Street economist recently told me, "Goldman is the worst," but every major firm's economic department now overtly "supports government spending stimulus and Fed pump-priming" as the path to economic nirvana. Which gets us closer to the real conflict: The free money the Federal Reserve has printed and the massive government spending under Obama have been very, very good to Wall Street. The Fed's policy of printing money and keeping interest rates at rock bottom give the banks access to borrow cheaply to support their operations, even if they don't lend that cash to Main Street. And Wall Street firms are making real money underwriting bonds, thanks to the stimulus, not to mention the various "green" spending programs that are at the heart of Obamanomics. Notice that Wall Street is telling us much more about the dangers of not raising the debt ceiling than it is about how two-plus years of super-low interest rates are finally starting to fuel inflation, as seen in the recent spike in commodity prices. Wall Street surely will give us more doomsday talk as the debt-ceiling debate rages on, but consider the source. After all, some of these same guys not long ago were making huge bets that housing prices would keep rising forever. Charles Gasparino is a Fox Business Network senior correspondent and the author of "Bought and Paid For." 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