Last week speaking on the state of the national economy I was asked by conference attendees how they should prepare for a default by the United States. “Cross your figures” was my reply.
Yet, then I assured them that there would be no default. All posturing aside, at the end of the day the Republic would not be brought down by such things.
Ezra Klein has a nice post on the dynamics inside the room vs the dynamics outside the room.
It always feels different in the room. In the room, everyone wants a deal. They want their name on legislation, in history books. They want to do the big things and make the hard choices. Then they leave the room and they learn their supporters don’t want the choices made if they’re going to be hard. They learn their colleagues know their names won’t be in the history books, and so they’re more concerned with making sure their names are on their desks in the next congress.
This is certainly true. What I would tack on, however, are the outside-outside dynamics. The men and women who will ultimately vote on the debt ceiling are men and women. They are humans with human frailty and one of those is self-doubt.
Everyone has a different set of elites that they feel uneasy facing. For some it is Nobel prize winning economists. For some it is billionaire entrepreneurs. For some it is Wall Street titans. For some it is the grand-old men and women of the civil service and the military.
Yet, I am betting that just about every one of the 435 members of the House has someone from whom a stern dressing down would leave a lump in his or her throat.
And, so when all of the elites line up to say that default is not an option, that’s an emotionally intimidating force that these men and women – most of whom are fairly ordinary outside of their positions as members of congress – must face.
When one of those elites is Grover Norquist, Grand Poobah of the small government movement, I find it hard to believe that the members will not yield.
Asked if Obama’s warnings that default would be a "disaster" were true, Norquist said that as far as he knows, they are. Via TPM
"Look I assume it’s a disaster, there’s no reason to assume otherwise. It’s gambling with the economics of the country to get that far," Norquist said. "We need to get to where first of all we can cut some spending, not raise taxes. As much as you can get is as much as we should fight for. But again: rather than close the government down or go into default, let’s take it to the American people, go into the next election and fix things then."