Yes, I’m starting to get more than a little scared about the debt limit showdown.
Not because of the breakup of talks last week, or the posturing this week ... that sort of thing is normal. Not because the sides are far apart, either. We’re talking budget here; these sorts of differences have been bridged before. The two sides hurtling towards each other in a high-stakes game of chicken? Old hat.
No, what scares me is the strong possibility that a large percentage of Republicans in Congress have come to believe their own rhetoric about the debt limit: that somehow it just doesn’t matter. That default is an acceptable option. What scares me is that epistemic closure among Republican leaders is very real, and very difficult to puncture.
What scares me is the possibility that it’s not a game of chicken at all. Republicans — at least some of them — aren’t thinking that they’ll win because Barack Obama and the Democrats will veer off and capitulate at the last second. They’re thinking that there is no crash ahead.
That’s the message from an excellent article today from Susan Davis, reporting about freshman House Republicans who seem to really buy what Michele Bachmann and others are selling: that there is no real debt limit deadline, and that default isn’t a big deal anyway. Veteran Washington observer Norm Ornstein is also worried, as is budget expert Stan Collender.
Several weeks ago, former Obama Administration OMB Director Peter Orszag predicted that it would take a financial market panic to get this done. I guess what scares me now is: what happens if the Dow drops 2000, 3000 points…and House Republicans take it as a signal that they’re on exactly the right track? What if Rush Limbaugh and Fox News interpret a market panic as a sign that it’s time to double down on tax cuts and Medicare cuts?
Now, I don’t think for a second that John Boehner or Mitch McConnell believe this nonsense (and as I’ve said, they realize that sooner or later, before or after the damage is done, eventually the debt limit will go up — and Boehner at least almost certainly will have to support it). And you never know — it’s very hard, in the middle of these sorts of confrontations, to know what is posturing and what is real. So perhaps they’ll still figure out a way to muddle through. But at this point, color me scared.