An investment advisor friend of mine says the belief on Wall Street is there will be a deal that will avoid a default.  If there is he thinks a short-term bump in the market for a couple of weeks will be followed by a return to where things are now, that the market is focused on 6-9 months down the road.  If there is no deal he thinks the US and global markets could lose a third of their value.  But he thinks there will not be a default. 

Boehner-Cantor could very well be just standard good-guy/bad-guy on the GOP side, where the game Boehner knows full well he's playing is to make it look for all the world as though his caucus and Cantor really are crazy.  Which is easy for Democrats and many others to believe at this point.  And which, as a negotiating ploy, can certainly have major advantages.  They'll milk every last concession out of Obama and the Democrats that they can and then do what needs to be done to avoid a default, or at least to avoid getting blamed for it. 

I am not entirely persuaded that a default will be avoided.  I think sometimes situations which are high-stakes do not reach what might appear to be the "rational" outcome.  People make mistakes, they miscalculate, they panic, etc.  We found out well after the fact that the Cuban missile crisis came far closer to full-scale hostilities, likely involving the use of nuclear weapons, than was believed even at the time.  There was no guarantee that the parties involved were going to be able to work their way back from the precipice.  Wall Street assumes there is an equilibrium and corrective factor at work whereas I think the evidence suggests sometimes there is not, at least not in the short and medium term, that sometimes what happens is that one thing leads to another and things just spiral out of control and you get a train wreck. 

I think the Wall Street view is premised on a view that there is an agreement that can pass the House, whereas I don't think that is clear at this point (not necessarily meaning there is no alternative way to avoid default), and that, true to its preferred world view, rationality will prevail in the end.  On the latter maybe they have better information than I do or than the public has about Cantor and the House GOP caucus' true intentions, that they are just playing the crazy to get as much as they can and that they really do know what they're doing (and that Obama will do whatever he has to to avoid a default, figuring the people who voted for him have nowhere else to go, which is all very easy to believe for anyone who has been paying any attention at all to how he has been governing.)

I'm not predicting default, just that I don't at all rule out the possibility of miscalculation, unpredictability, uncertainty, all the human stuff, not working out for the best.  From my point of view once Obama went down this road there was no good outcome for the economy and the jobless.  I am reminded of a Robert F. Kennedy quote, himself quoting what was said of the Romans: "they made a desert and they called it peace."

Some of us believed we had reason to question how much, or even whether, he would put himself on the line for a big deficit reduction package if a) the Bush tax cuts, which he'd promised to let expire, remained in place, meaning he'd have to get deficit reduction in ways much more likely to alienate erstwhile supporters; and if b) the jobs picture remained weak, especially heading into his re-election year.

So both of those have come to pass.  And yet he plows ahead.  So, no, I disagree with your analysis that it is nearly as cut and dried as you suggest--unless Obama's thought process works in as simplistic, non-situational and context-dependent, way as you attribute to him, with a "he said such and such, so why would anyone be surprised if he does such-and-such?" 

Just like I disagree strongly with those who say it was clear all along that Obama was going to govern as a "pragmatic centrist", making sure to kill some sacred Democratic cows along the way.  Because, in addition to playing music to please the ears of those folks, he also said a number of very specific things during the campaign that reflected a commitment to progressive policies.

So what else is new?  Politician sends out different signals to different groups of people s/he hopes to get votes from, knowing getting votes from only one or some "camps" won't win the election and hoping each group of voters chooses to listen only, or mostly, to the part they like, at least enough to vote for him.  Which worked to get him elected. 

It's just that it probably is impossible for him to meet the desires of both groups, given the nature and MO of today's GOP, which usually requires a choice, at least as each specific issue arises.  

In a sense, years 1-2 he tried to get done a bunch of things progressives wanted, with, predictably, some successes and some failures.  Since the Republicans took the House he has had an "opportunity" this year and will have next, to please those who want him to be more "bipartisan, centrist, 'pragmatic'".  So he hopes that between (he hopes/hoped) pleasing progressives at least somewhat in years 1-2 and pleasing "centrists" in years 3-4, he keeps both camps in line enough to carry the day next year.  I don't really have a sense that he has any coherent economic policy since he declined to continue to press hard for more stimulus after getting beaten up over Round 1 pretty badly all the way around, without much appreciation from his point of view. 

I think there has been cherry-picking of preferred words from Obama by folks who wanted him to pursue progressive policies and also from those who wanted him to govern as a "pragmatic, bipartisan, centrist."  My view is that anyone claiming to know before he became President what his "true" intentions were is asserting what could not have been known by anyone except, perhaps, Obama himself.  And then he could not have known how the particulars would play out, probably just figured he'd do his best to try to please both "camps" as best he could, not knowing what that would look like because there were too many unknowns going in.

This was my reaction to the Drew piece as well.  IMO, it was nothing more than tired, cynical mind-reading on the part of a run of the mill Washington hack who thinks that the only reason any politician takes a position on any issue is exclusively for political gain.

She also notes that in the piece that most liberal economists agree that our current level of deficit spending is unsustainable.  While I won't agree that Obama has no interest in positioning himself for a win in 2012, I don't think it's inconceivable that he might be thinking along the lines of, well, if cutting the deficit is the only conversation Washington is willing to have, why don't we take some steps to cut it in ways that won't place the sacrifices to be made entirely on the poor, working and middle classes? 

Yeah, but I see those quotes as saying Congress shouldn't create legislation without considering where the money will come from.

Note this in your bullet points ...

we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation

Sounds to me like he's hinting Congress needs to exert more effort in finding the money for the legislation they pass rather than rely on plastic.

And when he says this ...

The government is going to have to get serious about reducing our debt levels

It sounds to me as if he's talking about Congress increasing revenues or find reasonable spending cuts to pay off the debt caused by their negligence to fund past legislation.

And the last point he's emphasizing Congress is using the credit card to fund legislation more than what revenues can support.

However, the debt is money that has already been received and spent so there's a principal and interest owed. So I see the issue between debt and debt ceiling as a black and white issue ... no shades of grey.

BTW, the one about children inheriting the debt of today is a red herring. The debt is paid off of through taxes, sale of government property and the retirement of other legislative acts, such as both wars in the Middle East. But the real revenue machine is the public tax - the longer it takes to get back to full employment, the longer it will take to pay off the debt.

What I find annoying with Obama is his persistence in moving policy to the right as if common ground is the merging of Democrats with the GOPer's.

It says I am annonymus but you all know that I am the Decider. Obama is the Ditherer.

God bless America!

The citizenry, unlike our national leaders, lives in the real world where it's obvious we're in a depression which is considered an emergency situation by any measure.  But our leaders and pundits don't live in a world where 20% of the people of working age are unemployed.  In their world, they hear stories of people being unemployed, losing their homes, their families and their dreams, but they don't actually know anyone whose life is being destroyed by the depression and they don't have any concern at all they will ever be ravaged by it because there's full employment in the great imperial city for all the people they know and care about and so it must be so for others yes?  That's why we once again see the massive divergence of the discussion taking place in Washington being totally disconnected from the reality out in America.  Our leaders in both parties, but especially in the Democratic Party are completely out of touch and have no idea how deep and extensive the economic calamity is that is ongoing in this nation. Nobody expects the wacko Republicans to live in the real world, but the Democrats lack of connection to the common people and their plight is truly disturbing.  Making matters worse, Obama himself seems to be more out of touch than anyone else in DC and that's saying something!

Boehner just basically told the country Obama is a liar and told the President to fuck off. I'm so pissed I can hardly speak.

It means they have figured out that both sides are flippin crooked as hell and aren't playing that shit anymore.

So why vote at all if this is inevitably true?  If this was dominant thought amongst all Independents, one would probably just watch apathy take over and their drifting away as any kind of political force.

Independents are Americans ... with a capital AMERICAN. Overwhelmingly, they get the char-broiled double cheeseburger ... with extra bacon ... imagined long before ever entering the neon and cardboard shrine to American haute cuisine from which it will be ordered. Unless they are feeling like a big 'ole steak. And even if harsh reality means they end up with a damn turkey burger ... because of Fascism, and cholesterol ... they still self-identify with that thick, juicy steak.

You seem to make the mistake one sees all the time by treating all Independents as if they are of the same mind.  It is an oversimplification to say that there are liberal independents, moderate independents and conservative independents.  Some vote pretty much for one party over the other, but believe they are open to candidates from the other party should it present one worth voting for.  Others bounce back and forth between the parties in protest votes. Others still have their unique patterns.

Keeping it simple, the short of it is Obama and his team are not going after the Independent vote.  They are going after the moderate independent voters, and hoping the liberal independents tag along, just as they are going for the moderate Democrats, and hoping the liberal Democrats tag along (much to consternation of the liberals).  If in the process they can peal some moderate conservatives off who are finally fed up with the ideology trends and childish behavior of the GOP, then that is a winning recipe for 2012.

Some of these independents feel forced into eating a "damn turkey burger" by their doctor or spouse or society, but others prefer it, in fact embrace living a healthy lifestyle (I'm not one of those just for the record).  In other words, independents are as diverse, if not more so than the Democratic party.

One thing can be said of them - that is those who go to the polls and vote - they want to make choices they think will improve the situation.  Sometimes that might mean "the lesser of two evils."  Obama is clearly attempting to set himself up as that choice as the only adult in the room.  And in the end the politicians in the room with him are not children in a restaurant, they are adults elected by the people to do some real work.  I think the voters, independent or otherwise know that.

But my question is why what seems clear to me, that there continues to be a need for governmental stimulus because things are really bad, doesn't resonate with the American people.

Well, who is making that case in terms ordinary people can understand, and in forums which reach more than a very small percentage of the public, responding to frequent misconceptions or false information commonly put out by those opposing it?  If the answer is what I suspect it is--no one--then the lack of resonance for more governmental stimulus doesn't seem surprising, to me at least.  But in any case, for the GOP House (and Senate via threatened or actual minority filibuster, probably) it is a nonstarter and this White House does not believe in asking Congress to pass legislation it knows cannot pass at this time.

The latest Gallup poll shows that the public continues to favor addressing both the overall economy and the jobs situation as far higher priorities than reducing the debt.  That should be a hook right there for making a case for more stimulus, or at least not doing deficit reduction at this time (given GOP control of the House ensuring no further stimulus until 2013, earliest).  Connect for the public the dots between more jobs and more stimulus.  That is the public educational task for supporters of more stimulus.  On the face of it that does not seem like some inherently hopeless challenge to overcome.  If no one was saying they care a lot about jobs it might seem a pretty hopeless task.  But that isn't the case--quite the contrary.