Nuts! Hot Nuts! Get ‘Em While They’re Hot!

That would be John Boehner and his crew, playing a game of “chicken” with Democrats over raising the US debt ceiling, hoping to intimidate the Obama administration into accepting various extreme policy positions in exchange for raising the ceiling and thereby saving the US’s credit rating internationally. TPM’s Brian Beutler:

Republicans are now openly flirting with the theory that allowing the United States to default briefly on its payment obligations won’t be such a bad thing — and may even be necessary to extract concessions on entitlement spending in exchange for raising the debt limit.

But two of the biggest ratings agencies say they could downgrade the United States’ triple-A credit if the government misses even a single debt-service payment.

“A sovereign’s failure to service its debt as payments come due is a default according to S&P’s sovereign rating criteria,” writes John Piecuch, spokesman for Standard & Poors, one of the “Big Three” credit ratings agencies, in an email to me. “In that case, the rating would be lowered to “SD” (Selective Default).”

One is tempted to crack the old joke that the Republican behavior in this situation is what you would expect: standard & poor. But a downgrade in US credit rating would have its most catastrophic effects on Wall Street and large corporations, which are the GOP’s primary “clients” (and those “clients” know full well that they suffer the most risk). It’s really hard to see the political advantage of this for the GOP.

I keep trying to perceive some secret, insidious strategy in the threat, a threat which is unlikely to evoke any Democratic response to the advantage of the GOP… and all I can come up with is that the GOP leadership has finally departed the reality-based world altogether. Hot nuts! Get ’em while they’re hot!

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Comments

  • Kay Dennison  On Thursday May 19, 2011 at 10:05 pm

    Boehner is a disgrace to Ohioans and hard-working Americans everywhere. I hope they throw his you know what out next year!

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