'Establishment' Republicans Backing Brief Government Default. No, Really.
Are Republicans willing to actually take on Wall Street? Maybe when it includes a shot at forcing more ideological spending cuts.
It appears that even "establishment" (according to Reuters, anyway) Republicans are willing to risk the dire consequences threatened by Wall Street analysts and investors if the debt limit isn't raised. Though ratings agency Moody's has threatened to downgrade the U.S.'s credit rating from Triple A if it didn't see progress toward a deal on the debt ceiling, presidential candidate Tim Pawlenty and of course, Paul Ryan, the would-be slasher of Medicare don't seem to mind.
Treasury Secretary Geithner, of course, is warning that even a brief default could trigger another crisis--one we can ill afford with unemployment hovering above 9%. And he's got an unlikely ally in former Bush speechwriter David Frum, who told Reuters:
"It is deeply, deeply troubling the number of Republicans I now talk to -- and I include the mainstream -- who think a technical default is manageable."
Among the consequences feared by the Wall Street crowd is a loss of confidence in the dollar, Treasury bonds, and in the U.S. more generally, which could have effects on the market like that seen after the collapse of Lehman Brothers in 2008.
In other words: Republicans are playing a very dangerous game, one that could easily backfire on them. But nothing appears too outlandish to try if it could be used to prompt more spending cuts.