I believe that some way, somehow, a default will not occur on August 2nd. I speculate Obama will take the constitutional option before he lets that happen. He seems to be alright with taking his authority beyond conventional interpretation with the War Powers Act in Libya, so why not when the stakes are even higher? Shit will probably still hit the fan, but much more slowly than a full stop. Maybe the financial oligarchs will regain control of the Republican Party, so Obama won’t have a legitimate reason to expand presidential authority, but pessimists seem to be predicting our politics pretty accurately.
What’s more interesting to me is how much this will alienate the Tea Party/Republican Party from Wall Street – who helped manipulate the Tea Party into power in 2010 to punish Obama’s support of a weak financial reform bill. (How dare there be a bureau dedicated to informing consumers of the terrible contractual conditions we give them!). I’m curious to see where Wall Street’s donations come down in the 2012 cycle. There have to be boardroom discussions in Manhattan right now fearfully detailing just how wild-eyed these freshmen Republicans were in their last meeting with the government affairs folks. If I were a Democrat, I’d be eager to dip in the pie; that’s depressing for the rest of us, but hey, that’s how campaign finance works right now.
7/21 Addendum: 80 House Republican freshmen have signed a letter urging the House Republican leadership not to back the McConnell/Reid plan B either, leaving everyone wondering – how do we get out of the mess Republicans made for themselves?