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View Diary: GOP digging itself a debt limit hole (83 comments)

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  •  Here's the problem with the strategy. (10+ / 0-)

    A significant portion of the House Republican Caucus does not think that failure to raise the debt ceiling would cause a default on government bonds.  Since interest on the debt is (now, anyway) a very small portion of overall government expenditures, and since (as VClib pointed out) without raising the debt ceiling, the government has the cash flow to pay about 70% of its bills, a number of House Republicans just don't believe that it would be an economic disaster.  They just don't believe it.  They think that it would be like a government shut down on steriods -- the government would not default on its debts, but many government services and functions would be shut down.  

    I know, before your start with the "but they're WRONG" posts, whether they are wrong or not is not the point I'm making.  The point I'm making is that, wrong or not, this is what they believe. I've heard them, you've heard them.  And  because they believe it, they are willing to let the debt ceiling "deadline" pass without raising the debt ceiling. They don't believe there would be economic catastrophe, so they are willing to "go there."  

    The problem for the President is that he DOES believe that not raising the debt ceiling would cause an economic catastrophe.  Because he does believe that, he may not be willing to let that happen.  It may be a situation where he has to think, which is worse - these spending cuts the Republicans are demanding, or a default?  

    In other words, in a game of debt ceiling chicken, it's pretty clear that a number of Republicans believe they don't have to back down because they believe that doing nothing about the debt ceiling won't be all that bad.  I'm not sure the President believes the same thing.  

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