I think Chait gets the dynamics of the debt-ceiling hostage-taking exactly right: Obama absolutely cannot negotiate under any circumstances, which is unfortunate since Boehner is exactly the kind of clown who would end up shooting the hostage:
Obama’s incentive structure is simple, then: Allowing Republicans to default on the debt now is better than trading something that allows them to threaten it later. His best option is to refuse to negotiate the debt ceiling and have the House raise it before October 17. His next best option is to refuse to negotiate the debt ceiling, allow default, and never have to go through it again. Bargaining merely postpones, and worsens, the next default crisis. No negotiated debt-ceiling price is small enough to be acceptable. There is therefore no circumstance under which bargaining for a debt-ceiling hike makes sense, even if the alternative is certain default.
As the debt-ceiling deadline ticks toward midnight, Obama ought to be able to make his determination clear enough that House Republican leaders understand their only choices are to raise the debt ceiling or breach it. Default would risk not only economic calamity but the potential of an electoral one for the otherwise unassailable Republican majority. But history is replete with disastrous miscalculations. They’re often made by weak, short-sighted leaders facing pressure to demonstrate toughness from internal opponents. That is to say, Boehner is exactly the kind of leader who would blunder into a calamity like a debt default.
Yet Obama simply has no alternative but to accept that risk. The stakes are higher than resisting the specific demands Republicans are making, and higher even than the economic havoc of a debt breach. Obama is fighting to save his presidency.
To show you who we’re dealing with, consider this:
But many House Republicans put little stock in such pronouncements.
“Economists, what have they been doing? They make all sorts of predictions,” said Representative John Fleming, Republican of Louisiana. “Many times they’re wrong, so I don’t think we should run government based on economists’ predictions.”
Maybe defaulting on the debt would be bad. Maybe it won’t! Who knows? Not pointy-headed economists! What the hell, why don’t why try it because it will probably cause Obama to implement the 2012 platform of the Texas Republican Party.
The current Republican political strategy seems premised on studying Buchanan’s decision to demand that Kansas be admitted as a slave state against the wishes of its electorate, and concluding it was such a political and moral triumph that it should be emulated whenever possible. Given that these people ahve the power to blow up the world economy that’s pretty scary.
And, no, we shouldn’t be rooting for the House Republicans to go down this path. It might cause some House Republicans to lose their jobs, but it will cause a lot more people who don’t have K Street sinecures waiting for them to lose theirs. Obama can’t negotiate, but this is a real potential disaster.