I just read a post on TPM, which has me wondering and worrying whether I have underplayed the danger of our country going into default. I have assumed GOP leadership would keep us from going there. The comments from this TPM reader causes me to question that. Here's an extended quote fom the TPM reader TW's comments, which TPM published:
I work in the investment industry and I am watching the town hall meetings, this thing with McConnell and it’s bringing flashbacks to 2011. I don’t think most people understand just how close we were to a real meltdown that summer. Without Biden and McConnell, there would have been a default and that would have dwarfed 2008. Now normally, the country would be able to count on the fact that they averted disaster last time, so therefore, they will find a way to avert it again this time. But as I’ve thought about it all week (and for some time before this week), I’ve had a nagging thought that this is all wrong. But, I couldn’t put a finger on it either.
But after seeing the coverage of the town halls this week and listening to the right wing turn on their own, little by little, I guess I get it now. These people really are nihilistic and the only thing that will satisfy them is a total breakdown of government. Only then, they believe, can we have our “freedoms” and our “rights”. I don’t pretend to understand how you mentally get to that point, but that’s where they are.
Now, I know that there have always been crazy people in this country throughout our history, but there has also always been rational people who think first about the country and act accordingly. But that’s not where we are today. Rational people have been voted out or left and in their place are the Lee’s, Cruz’s, Rubio’s, etc. And while they claim to be capitalists and free market proponents, they couldn’t negotiate themselves out of a paper bag in the real world, and they have no understanding of practical economics. You can spout Ludwig von Mises all you want, but it has no practical application to the real world.
Which brings me back to McConnell. For all of the issues I disagree with him on, at least he was rational and would cut the deal to keep us from going over the big cliff. If he’s gone over to Crazyland and Boehner has abdicated any remaining parts of his speakership, then what’s left?
And all this comes as economically, our world is getting better. I realize that there is a ways to go with unemployment/underemployment, housing, etc. but this economy is still getting better. The market is up because of that fact. I know there’s a lot of noise around what’s driving the market, but at the end of the day, professional investors would not be pushing money into the market if they didn’t think the overall economy was headed in the right direction.
So, yes, I am worried. A government shutdown can be dealt with, that won’t kill the economy, but the debt ceiling/default will. And without someone who can/will cut a deal, it’s unnerving to watch. At this point, I think we are in a more dangerous position than 2011.
I apologize for the length, but you guys are on the right track here with your reporting. This is the story of the fall, and very few people are talking about it yet.
I don't think we will default. But this is a thoughtful comment from an obviously thoughtful man. We need to pay attention. And we should most likely be more than a bit worried.