Calculated Risk is one of the best blogs out there. But I think this post makes a serious mistake regarding the debt ceiling negotiation:
“.., but one thing is clear, the Congress will fold and the debt ceiling will be raised. There might be some agreement with the “sequester” that gives Congress some cover, and if that is the approach, then Congress should look to settle this early.”
This is not at all clear to me.I think there are people in congress who are not at all willing to raise the debt ceiling and would rather push our country into a depression than raise the debt ceiling.
It does not seem clear to me at all Congress will fold on the debt ceiling. It seems as though they think hitting the debt ceiling would not be a big deal.
Here’s a quote I found both amusing and disturbing:
“This spectacular display of idiocy is, in microcosm, why negotiating with the House GOP is impossible. Because common negotiation tactics require dealing with an opposition that understands reality. “Leverage” only works against rational people. A large number of House Republicans aren’t just “nihilists,” willing to blow up the economy to get what they want, they’re plain morons who have impossible and horrible goals and no clue whatsoever how to reach them.”
There is a significant chance we will hit the debt ceiling – the markets just don’t realize this yet.