Debt Ceiling (cont.)

Another short post. It's 10:14 and I'm ready for bed.

I remember my Dad, a few years ago, telling me: "Politics is great fun to watch. Every bit as exciting as football. And it just keeps playing," or words to that effect. And now I am a True Believer!

Watched cuts that amounted to most of the President's press conference. Have checked a bunch of blogs. Most people, even progressives, still have no idea what the President's going to do. Some say he's made up his mind that without revenue increases in the mix, he won't take the deal. Others say he will compromise at the last minute as he did on taxes before Christmas. One or two think he has given up on negotiations.

Conservatives are still certain he will fold his tent and agree to a deal without tax increases, but one of the problems with most of this group is they don't believe there would be real consequences from default.

The Dow had a good day, after the news from Greece. Bond yields are inching up, but no sign of panic. No one seems to think there is much chance of default. I don't think we'll default, because I think Treasury will keep writing checks. Since last night's post, I've discovered the 14th Amendment prohibits the US from not paying its debts, so there is another legal defense for my theory of John Wayne Obama at the OK Corral.

My forecast is the same as last night:

Obama will not fold on the revenue question.
Republicans will be pressed, but won't budge either.
We will go into the Abyss, or so we will think. The bills will keep being paid to our creditors, and Republicans will have supported the cliff-jumping without any rescue plan.

If they are smart, which I sincerely doubt, they will immediately say they knew this was the game all along. If they are angry and not composed, they will blast the President for malfeasance and thereby directly condemn themselves. Obama had a parachute for all of us. They did not. The plan was to wreck the economy and thereby ruin Obama's 2012 reelection chances.

On August 3-4, Republicans will need to be very light on their feet, and quick to share a laugh with the President. Either way, the President wins.