The problem with any detailed discussion of the myriad implications of what just happened – some startling, some alarming, some reassuring – is that any such discussion depends on something happening. And this weekend – with the ongoing negotiations on raising the debt-ceiling, so that the United States doesn’t go into default in ten days, causing worldwide financial panic and economic collapse – nothing happened. John Boehner – the nominal leader of the House Republicans, with its large contingent of Tea Party freshman who consider him a wimp and a fool, and with his second in command, the smarmy and not-too-bright Eric Cantor, who wants Boehner’s job – promised this matter would be settled before the Asian markets opened, at four in the afternoon on Sunday in Washington. It wasn’t settled. He was, as they say, trying to herd cats (you might remember that classic commercial) – or maybe the International Date Line confused him, as somewhere it’s always tomorrow already. Those markets opened down, but not catastrophically so… yet. The world is worried, but not yet in full panic. The Dow futures were falling sharply, presaging a dismal Monday, or worse. The Dow had closed the previous week within spitting distance of a new post-crash high. That’ll be gone. But no one really knows what happens next.
Yes, Sunday had been filled with emergency meetings of all kinds – Republicans and Democrats with the White House, Republicans with Republicans, Democrats with Democrats – but nothing came of any of it. Boehner, the leader of the House, came up with what he said was a new plan. It didn’t seem that new, but he said that this time the Republicans would go it alone if they must – which was new, and absurd. The House can’t “go it alone.” The Senate, controlled by the Democrats, has to pass any bill the Republican House approves, and the Democratic President has to sign it. Nothing can be resolved until whatever passes both houses lands on the president’s desk and he makes his final call. That’s just how things work. So that was nonsense, but Boehner had to say something. He simply said the structure of government as laid out in the Constitution isn’t what it is. That was wishful thinking – he, as speaker of the House, simply takes over – or it was playing to the crowd. But the structure of the government is what it is.
And The New York Times was reporting Senate Majority leader Harry Reid was putting together a package – that one had two and a half trillion in spending cuts, and no new revenue at all, not even closing tax loopholes for billionaire collectors of rare cheeses or whatever. But that was sure to be unacceptable to Republicans – one trillion of those cuts was assumed to come from winding down the wars in Afghanistan and Iraq. The War-Against-Islam-Forever Party won’t stand for that. That seemed dead on arrival, yet the Reid proposal could be characterized as asking if we give you everything you want – all spending cuts, massive cuts that will put tens of millions or more Americans out of work and further collapse demand in a weak and dying economy, with no new revenue features at all, so the government can do next to nothing – will you finally raise the debt ceiling? The answer to that was obviously no.
So nothing happened. And the worried markets crumble, and our credit rating will probably be downgraded anyway – on the general principle that we seem to have, now, a completely dysfunctional government – so don’t invest there. The damage has already been done, and it only gets worse.
But nothing happened. When something does happen – sovereign default or a miraculous compromise – there will be something to discuss – all sorts of implications. But for now we wait, and watch the world slowly crumble.