Jonathan Bernstein points out the obvious:
If in fact the debt limit is not raised well beyond the August 2 target date, and the economy suffers the severe blow that experts, Democratic politicians, and most Republican politicians believe is likely to happen — the dissenting Republican politicians such as Michele Bachmann, Steve King, and Louie Gohmert (and other insiders) will not, in fact, admit that they were wrong about it. Instead, they will blame Barack Obama for implementing the debt limit badly. And they will do so no matter how he implemented it …
That nihilistic strategy is already getting a full-throated endorsement from Trump:
The fact is, unless the Republicans get 100% of what they want, and that may include getting rid of Obamacare, which is a total disaster, then they should not make a deal other than a minor extension which would […] ensure Obama doesn’t get elected, which would be a great thing. […] When it comes time to default, they’re not going to remember any of the Republicans’ names. They are going to remember in history books one name, and that’s Obama.
What I worried was too cynical a view of the GOP is, of course, broadcast directly from the Republican propaganda channel, Fox News. Give them points for candor, I guess. Chart from Macroeconomic Advisers:
The probability that Congress and the Administration fail to raise the debt ceiling before the Treasury runs out of cash has risen substantially. Our initial estimates are that if such action is delayed one month while a modest deficit-reduction plan is negotiated, Treasury debt will be downgraded, interest rates will rise modestly, and the economy will enter a brief growth recession.