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Call The Hostage Takers’ Bluff

By Matthew Yglesias  

"Call The Hostage Takers’ Bluff"

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Raising the debt ceiling is unpopular, which may seem to militate against taking a hard line on it, but the reality is that the debt ceiling is going to get raised. This isn’t a voting issue for anyone in the electorate, but as Politico reports it is life or death for Wall Street:

MONEY THEFT — WALL ST. TO BOEHNER: DON’T MESS WITH DEBT — From POLITICO’s Morning Money — EXCLUSIVE: GOP SPOOKED ON DEBT LIMIT? – M.M. hears that House Speaker John Boehner has been reaching out to top Wall Street players asking how close Congress can get to the May 16th deadline (or July 8th drop-dead date) for raising the debt limit without seriously unnerving financial markets. The questioning is not going over well. “They don’t seem to understand that you can’t put everything back in the box. Once that fear of default is in the markets, it doesn’t just go away. We’ll be paying the price for years in higher rates,” said one executive. Boehner’s office last night would not confirm the conversations.

This is why the correct posture for the White House is as follows:

— Complete and utter willingness to raise the debt ceiling. Enthusiasm, even.
— Complete and utter unwillingness to exchange anything for a debt ceiling increase. Rabid hostility, even.

Then the question becomes “do a majority of members of congress favor raising the debt ceiling?” And the fact of the matter is that the answer is yes. Boehner isn’t even asking Wall Street whether or not raising the ceiling is a good idea. He takes it for granted that it’s a good idea. He’s just asking them how much screwing around he can get away with. And they’re telling him that they don’t like screwing around. Of course these are rich people, so they’ll tolerate some screwing around if it’s done in pursuit of lower taxes on rich people. But at the end of the day if the White House simply refuses to get sucked into a negotiation, the debt ceiling will be raised.

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