Ron Paul, who is spending a ton of money in Iowa right now, is expected to finish in the top three at the Ames Straw poll in a couple weeks. There is a solid chance that he beats either Michele Bachmann, Tim Pawlenty, or both of them. Though Ames is not predictive of the outcome of the presidential nomination contest, it is a key test of what is going on in Midwest among the GOP rank and file, the same group that House members of Congress have to worry about in a primary challenge. So just as an experiment, let’s look at what Ron Paul is saying about the debt ceiling.

It’s actually really interesting. Some in the Tea Party argue that letting the debt limit expire without an increase will simply force a decrease in government spending, without default or lasting harm to the United States. This is not Paul’s view. He argues that by failing to raise the debt limit, the U.S. would default with painful consequences.

He also argues that this will mean, as the President, Wall Street and the Treasury Secretary argue, an increase in interest rates, not just for the government, but for regular Americans. The cost of car loans would go up. The cost of house loans would go up (and the values would probably come down), as would the monthly payments for people with adjustable rate mortgages. The amount small businesses pay to get loans to expand their business would go up. If this happens, just about any economist in America would tell you the result: Slower economic growth, if not recession, and less employment.

“Default will be painful,” Paul wrote in a recent op-ed. But that is, nonetheless, exactly what he wants to happen. It is, in fact, the core message of his first campaign ad.

[youtube=http://www.youtube.com/watch?v=UUNIeOB0whI]

So to summarize, here is what Ron Paul, who may yet win the biggest GOP polling test of 2011, is advocating: Less short term employment, slower economic growth, and higher costs for things that Americans buy regularly. If this seems an unlikely campaign strategy, you must keep reading. Because Paul in not in favor of making the country he wants to lead suffer just for sport. He argues that if we do not suffer now, great “cataclysmic” consequences await us in the future. “A future default won’t take the form of a missed payment,” Paul argues, “but rather will come through hyperinflation.”

This apocalyptic argument exists outside of the mainstream of economic thought. It is hard to find anyone working in a leadership position on Wall Street who believes it, and there are but a few economists who agree with Paul. But this view has considerable pull within country among the people, many of whom participate in Republican primaries. And this, in a nutshell, is the sort of challenge that Boehner is facing as he tries to save face by whipping his caucus behind a bill many do not like.