Are There Limits to the Crazy?

TPM Reader JL asks whether it’s really possible that we’re about to make another run at defaulting on the national debt or whether there really are limits to the crazy.

I was interested to see TW’s comments on fiscal matters. As an investment advisor, I have a keen interest in the topic. Politico joined the conversation this AM and I read that piece with interest as well.

I agree with TW and the Politico piece that the rank and file GOP seems more nihilistic than ever. Not only are they not afraid of something truly untoward–they seem to crave it. So I get that. And certainly GOP leadership has less control over the rank and file than it ever has. I get that too. But the radicalism, nihilism and disarray of the GOP has its limits. If that wasn’t the case, then the effort to use the threat of a government shutdown to defund Obamacare would be on track and I think everyone acknowledges that that crazy idea is going nowhere.

So why is the idea of triggering a debt default any different? Ok, yes, I can see that it’s different in certain respects. The effort to defund Obamacare was more clearly flawed and I would imagine there are some semi-sane GOPers who aren’t willing to go to the mat over defunding but would go to the mat over the debt ceiling. But if Obama and Dems hold firm, and I presume they will, then leadership and various sane voices in the GOP will pull the party back from the brink for the simple reason that they want to hold onto the House in 2014. They are clearly poised to hold on, but in the event of a debt default debacle, all bets would be off.

The last time debt default was on the table Boehner clearly saw that this was a losing issue for the GOP and quickly punted, creating the new deadline later this year. I just fail to see how the calculus has changed. Sure, Mitch McConnell will have to align himself with the crazies. And sure, there will be lots of heated rhetoric and it will look dicey for a while. But at the end of the day, Boehner will ignore the Hastert rule if he has to and Harry Reid will get enough Republicans to avoid a filibuster. And there will be threats of Boehner losing his speakership over the matter. And they’ll come to nothing.

I wouldn’t bet my life on all of that, but as long as Obama and Dems hold firm, I feel pretty good about the debt ceiling. Of course there’s lots of other fiscal stuff that has to be resolved. And I expect it will get pretty ugly and the stock market will probably get whacked at some point. But a debt default? Pretty unlikely from where I’m sitting.

I would dearly love to hear more from TW and those who share his/her views. Maybe I’m missing something–it wouldn’t be the first time.