My economics skills are all but non-existent; I know what I taught for my Actuarial Maths course, and that's about all. Having said that, I don't think you really need to know your Keynes from your Friedman to grasp the basics of the current fight.
DEMOCRATS: Failing the debt ceiling would be disastrous on a global scale!
REPUBLICANS: Yes, it would!
DEMOCRATS: We must raise it!
REPUBLICANS: So long as we get what we want!
DEMOCRATS: What do you want?
REPUBLICANS: Spending cuts!
DEMOCRATS: Only if we get tax increases!
REPUBLICANS: Let's cut a deal!
DEMOCRATS: Here are your spending cuts!
DEMOCRATS: Now about those tax
REPUBLICANS: Fuck you!
An awful lot of ink and bile has been spilt on the way the GOP has behaved during these "negotiations". Essentially, it boils down to this: the Republicans get literally everything they ask for, without the Democrats getting anything, or the global economy - the global fucking economy - goes into free-fall.
The liberal/left-leaning/remotely sane areas of the blogohedron are going mad, desperately trying to process why anyone would be so sociopathically irresponsible. The Republican strategy, they argue, is to simply sit in a corner demanding they shouldn't ever have to increase taxes until Obama caves in the hope of, y'know, keeping the world turning.
That would be insane, of course. And whilst my contempt for the Republican leadership is both boundless and well-documented, I don't think they're this crazy. I think they have something up their sleeve.
Or rather, some of them do. The Tea Party, as far as I can tell, is taking advantage of the crisis to start demanding the most imbecilic legislation imaginable. Hardly a surprise, of course.
But for the larger block of what I'll reluctantly call "The smart GOP", I think a different strategy is in effect. If I'm right, the plan is pretty simple: reject all offers, all deals, even all serious attempts at negotiation until the eleventh hour. Then have a super-secret Republican huddle, in which tears are shed and hard choices made.
Then announce a press conference. A big one. A huge one. And walk to the podium and say: "The Republican Party is opposed to tax increases. They are never a good idea, and at this point in our nation's history, with soaring unemployment and a low median wage, they're frankly insulting. However, the debt ceiling must be raised to prevent calamity. The Democrats have agreed to many of the spending cuts we have asked for, and in return we are prepared to make equally hard choices. We are willing to increase taxes N and M by X and Y percent. We ask for only one further thing in exchange.
The job-killing Affordable Care Act must be repealed."
BAM. That's how you do it. You take Obama's signature act, and argue that it costs so much that it's a deal breaker. Tax cuts on the rich are massively popular. The ACA is (just) the wrong side of public opinion. So you swap a very unpopular stance for one the US public has decidedly mixed feelings about, and you do it close enough to the deadline that alternatives suddenly seem distinctly reasonable.
And you do it in the certain knowledge that the American media won't spend even five seconds considering why this has been asked for and what the consequences to poor people will be. All they'll give a shit about is that the Republicans have "shown leadership" (stopped sulking) and "offered a bipartisan solution" (agreed to the debt ceiling range in exchange for Obama's second term).
I might well be way out on this, of course, but it's something to think about.