Reading a couple of articles today I am becoming increasingly pessimistic about that a compromise on raising the debt ceiling can be reached (I am, of course, wholly pessimistic about what the content of any possible compromise would be).
This first article by a hedge fund manager who seems to at least pay lip service to being liberal gives this entry its title, examining how
Obama increasingly seems to agree with the Tea Party on savage cuts. Now this would seem to suggest a compromise is more likely, not less, but as I have argued with Tony, who is clearly vindicated by this piece, it isn't Obama so much as Democratic legislators that are an obstacle to total GOP victory on this issue.
Obama's seeming desire to gut Medicare, Medicaid and Social Security is so unappealing to the voters that the selfish pragmatism of many Democrats will prevent them from agreeing to a capitulation. Defending these three broadly popular programs is a big vote winner, attacking them is a vote loser as Paul Ryan learnt a couple of months ago.
Further at
this piece by Will Hutton asserts, basic human interaction requires some give and take. For reasons of pride and for the ability to tell angry constituents they at least put up a fight Democratic legislators may not be willing to throw cherished welfare programs under the bus. Even if Obama explains in a soaring and wondrous speech why the poor should go die in a fire and why people under the age of 55 expecting to retire at some point are unreasonable.
But while it will be the political reality of legislative politics that prevents absolute capitulation by the Democrats it is Obama who is preventing any other outcome. If he had fought for anything near a middle ground rather than agreeing to make major concessions on social programs on day one then there would be some impetus for compromise, something for Democratic legislators to hang their hats on and, much more importantly, an opportunity for more moderate House republicans to push for compromise too. Sure the Tea Partiers are happy to drive straight off the cliff but older GOP hands will probably not want to see the end of the American empire, even if only social programs and civilian jobs are lost following a default with more expensive credit the American war machine is that much harder to maintain.
There are other signs a default is becoming a more likely scenario. A look at the business press, Fox News and others shows you the increasing suggestion that a default wouldn't be so bad. Some people have taken away from this the belief that big business and the super rich want a default. This is highly unlikely, I mean they'd be better off than the rest of us sure but the potential upheaval is unlikely to be appealing to them.
What instead this "default aint so bad" rhetoric is for is a form of spinning a very bad scenario into being Obama's problem. You plant the seed that a default really need not be that bad if you're smart, you're competent and then when the inevitable major problems occur you scream as loud as you can it is Obama and the left's fault for not being competent. Thus you attempt to shift the blame from the debt ceiling debate, where GOP intransigence might get blamed to it being wholly an issue of presidential control. Default as a controllable thing gone bad lays the blame solely at Obama's door.
Still given I don't think anyone beyond the Tea Party really wants default the fact the business press have shifted from trying to prevent a very bad thing to damage control on that very bad thing is not a good sign. Of course maybe the rich will profit from a default in a way I don't understand or perhaps the business press are just idiots, both are entirely plausible.
I still think there is a very good chance we'll get some kind of settlement on the debt ceiling before August 2nd but I will reiterate that the mainstream view that there is nothing to worry about is incorrect. We'll have to see I suppose.
