By Bill O'Reilly

If the federal government does not raise the debt ceiling by August 2, there will be an economic catastrophe in America. That's what President Obama and Treasury Secretary Geithner are saying:

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TIMOTHY GEITHNER, TREASURY SECRETARY: There is no credible argument. No responsible leader would say the United States of America for the first time in its history should not pay its bills and meet its obligations. That would be catastrophic for the economy. Everybody understands that.

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Well, not quite everybody. Congresswoman Michele Bachmann says she will not vote to raise the debt ceiling, no matter what:

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MICHELE BACHMANN GOP PRESIDENTIAL CANDIDATE: I know that we can't keep spending money that we don't have. That's why I fought against the wasteful bailout, against the stimulus. I will not vote to increase the debt ceiling. I'm Michele Bachmann and I approve this message.

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Now, Mrs. Bachmann is not alone. There are other Republicans who say they simply will not vote to borrow more money, even if the president and the Democrats approve dramatic spending cuts.

"Talking Points" believes that is not a wise position; that if big spending cuts are agreed upon, the federal debt ceiling should be raised for the good of the nation.

It's the same thing that happened three years ago when President Bush told the country the economy was about to collapse because the financial industry was going under. Some Americans did not believe that, but all the evidence says it was true, that the feds had to bail out the financial industry, and that's what happened. Same boat, different year.

You can imagine what the worldwide markets will do if the USA defaults on obligations in August. All of us will suffer economically because foreign investors would begin to pull their money out of America. The dollar would plummet, along with stocks.

So a deal must get done, but President Obama is making a huge mistake in trying to raise taxes now. Why bother with that? Just campaign on your economic position, Mr. President. And if you get re-elected, you can raise taxes later.

On the GOP side, we need tax reform in this country, we need to raise more revenue in smart ways. Perhaps a one percent national sales tax; that could raise close to $100 billion a year without hurting the economy. That money could fund Medicare.

There are ways to get a deal done and make the country stronger. Raising the income tax is not one of them. How about a flat tax?

Summing up, the debt ceiling has to be raised, income taxes have to stay where they are, and government spending has to be cut dramatically. If those things do not happen, we are all in big trouble.

And that's "The Memo."

Pinheads & Patriots

New York Yankee shortstop Derek Jeter got his 3,000th hit on Saturday.

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UNIDENTIFIED MALE: Three-two, deep to left field, going back. Looking up! See ya! Three thousand! History with an exclamation point! What a way to join the 3,000 hit club. Derek Jeter has done it in grand style!

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Now, the guy who caught the ball, 23-year-old Christian Lopez, gave it to Jeter. What a generous thing to do because the ball's worth a lot of money. The Yankees gave Mr. Lopez a bunch of stuff, including front-row seats for the rest of the season. Christian Lopez and Derek Jeter are patriots.

— You can catch Bill O'Reilly's "Talking Points Memo" and "Pinheads & Patriots" weeknights at 8 and 11 p.m. ET on the Fox News Channel and any time on foxnews.com/oreilly. Send your comments to: oreilly@foxnews.com.