Why I'm pessimistic about a deal on the debt ceiling

Everyone seems to think we're near a deal that will ultimately lead to a Republican surrender on the debt ceiling and the shutdown.

Well, not so fast.

Senator Ted Cruz (R-TX), in his new role as Ron Paul's prophet, is trying to rally Tea Party support against a deal. And it seems to be working.

This means that John Boehner has a choice.

He can either throw the Tea Party caucus under the bus and deal with the electoral consequences (2) (3); OR, he can validate Chinese FUD about American treasury bills, causing a recession in the short term and effectively ending our role as the indispensable economic and military hyperpower, forever.

EDIT: Looks like he chose validating Chinese FUD. The White House, naturally, has rejected his deal.

Why I'm now more pessimistic about the debt ceiling deal

Earlier I said that the Boehner had a choice between:

1. Either throwing the Tea Party under the bus and dealing with the electoral consequences,


2. Or ruining the economy, the nation's credit, and more permanently, our status as the top global power.

It looks like I underestimated the electoral consequences:

@gopleader If the #GOP will not stand up for real Americans and fight #Obamacare, it is time for a new party that will. #teaparty #tcot #war

— Tea Party Nation (@teapartynation) October 14, 2013

This could be an existential threat to the Republican party, because:

Overall, they make up a minority (37%) of all Republicans and Republican-leaning independents nationally. Yet this group is more likely than other GOP voters to say they always vote in primary elections; as a result they make up about half of the Republican primary electorate (49%).

If the Tea Party makes good on this threat, the likely consequence is a third party that works as a spoiler in future elections, much like the Green Party in the Nothing Decade, or the Harold Washington Party in Chicago in the late 1980s and early 1990s. On the other hand, in the unlikely case that the Tea Party does what the Greens haven't - slowly build a base of power with local and Congressional races - we could see the GOP go the way of the Whigs.

I think the Republicans would rather default than face the demise of their party.