Paul Krugman Declares Victory in the Debt Ceiling Fight – But But But

No So Fast Paul This Fight Ain’t Over

If the Congress does not increase the total amount of debt that the United States government can have then in a couple of weeks the government cannot pay some of its bills.  In 2011 Republicans leveraged this into making President Obama negotiate, with the result that Republicans think they can force him to agree to major cuts in social programs in 2013 and beyond.

Republicans are now signaling that maybe they won’t go down this road again, that they don’t have the political power to do so.

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House G.O.P. Agrees to Lift Debt Ceiling for 3 Months

By JONATHAN WEISMAN

·                               Published: January 18,

WASHINGTON — Backing down from their hard-line stance, House Republicans said Friday that they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction.

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The eminent economist Paul Krugman, the most able writer on contemporary economic policy today, or maybe ever is declaring victory.

When you’re wrong, you’re wrong. I thought that by ruling out any way to bypass the debt limit, the White House was setting itself up, at least potentially, for an ignominious cave-in. But it appears that the strategy has worked, and it’s the Republicans giving up. I’m happy to concede that the president and team called this one right.

And it’s a big deal. Yes, the GOP could come back on the debt ceiling, but that seems unlikely. It could try to make a big deal of the sequester, but that’s a lot more like the fiscal cliff than it is like the debt ceiling: not good, but not potentially catastrophic, and therefore poor terrain for the “we’re crazier than you are” strategy. And while Republicans could shut down the government, my guess is that Democrats would actually be gleeful at that prospect: the PR would be overwhelmingly favorable for Obama, and again, not much risk of blowing up the world.

The rest of us are not so sure.  No votes have been taken, there are a lot of crazies in the House and based on four years experience no one should rule out the President caving.  On the other hand has there ever been any body of legislators quite as imbecilic as the current Republicans in the House?