No Dealing On The Debt Ceiling, Part 36

So what's the endgame on the debt ceiling?  What I've been reading tells me that people are no longer worried about who wins, but who loses with the least amount of damage to their chances in 2012.

What's more disturbing is that I'm seeing this play out on the right as Megan McArdle actually applies logical discourse (and Glenn Reynolds agrees with her)...

Podhoretz reads a Quinnipiac poll showing that by a margin of 48-34, the public is going to blame Republicans and not Obama if we don’t raise the debt ceiling, and joins the ranks of the Washington sellouts . . . . Voters are telling pollsters they’re going to blame the Republicans for the shutdown. And the spending cuts you’re going to do won’t even be that popular with the tea party, who aren’t much more enthusiastic about Medicare/Medicaid cuts than the rest of the country.

To me that sounds like “huge Democratic victory in 2012″. I know, I know–if it’s so “great for Democrats”, why aren’t they urging this course? Well, one school of thought says that they are–and neatly maneuvering the blame onto the GOP, thanks to the tea party’s very vocal intransigence. But if that’s a little too Machiavellian for your taste, the simpler answer is that this can be lose-lose. If we shut down the government, key social programs get hurt, the economy contracts, and the Democrats have to cut spending in a recession in order to make the budget balance after this little contretemps raises our interest rates. But the fact that the Democrats are worse off doesn’t mean that the Republicans are better off. The Democrats can lose while the Republicans lose even bigger.

...on the left from Matthew Yglesias...

This isn’t a sudden “shutdown.” Nor is is true that we have to default on obligations to our bondholders. Rather, it means that government outlays are now limited by the quantity of inbound tax revenue. But for a while, the people administering the federal government (to wit Barack Obama and Timothy Geithner) will be able to selectively stiff people. So the right strategy is to start stiffing people Republicans care about. When bills to defense contractors come due, don’t pay them. Explain they’ll get 100 percent of what they’re owed when the debt ceiling is raised. Don’t make some farm payments. Stop sending Medicare reimbursements. Make the doctors & hospitals, the farmers and defense contractors, and the currently elderly bear the inconvenient for a few weeks of uncertain payment schedules. And explain to the American people that the circle of people who need to be inconvenienced will necessarily grow week after week until congress gives in. Remind people that the concessions the right is after mean the permanent abolition of Medicare, followed by higher taxes on the middle to finance additional tax cuts for the rich. 

And from the more objective center from Nate Silver crunching his numbers.

Now, that doesn’t mean that Republicans won’t be able to extract any concessions at all out of the Democrats. It’s possible that the White House — which has been risk-averse in recent months as it has focused on Mr. Obama’s re-election — might not be willing to take the chance of something going wrong. It’s possible that the White House could give the Republicans some concessions that they viewed as minor, inevitable, or actually desirable from a political and policy standpoint.

But Mr. Boehner may face just as much risk as Mr. Obama, if not more. He has promised his more conservative members that he will extract significant concessions from the Democrats before he agrees to an increase in the debt limit. A White House that was willing to play hardball could put him to the test, and perhaps cause a substantial loss of face.

Everything I'm seeing is now involving not "Can we make a deal?" but "How badly will the inevitable deal be for both sides, and how far into the Wall Street technical default market crash scenario do we have to get in order to get said deal?"

In other words, both sides are going to lose.  One side will probably lose worse than the other.  But the American people in the middle?  We're no longer discussing if voters going to be hurt by this, but how badly they will be and who they will take it out on.

Pretty depressing, I know.

[UPDATE]  CNN finally discovers that not only is the Tea Party fine with destroying the economy by not raising the debt ceiling, but that they are making it known that no deal can possibly be acceptable.   Hey CNN, welcome to 2009.