The Dow dropped over 300 points per day, during the 2008-2009 recession. A drop in the Dow to, say 12,000 (it's above 14,700 now) will get the GOP moneyed interest screaming. That may be the only leverage to get the House to fund the government again.

Well, you could offer to give them what they want in exchange for taking away their weapon. For Republicans, allow states to defer health care implementation on an annual basis (a vote every year by every state that wants to defer). For Democrats, permanently eliminate debt ceiling and funding votes, plus make it so that the minority party in either house can submit bills for a vote one day a week. Democrats get a functioning government back and Republicans can make it so Texas does not have health care. Everyone wins!

@3 You mean everyone wins except the millions of working and middle class families in states controlled by Republicans.

You DON'T negotiate with Crazy, because Crazy isn't interested in negotiation.

The GOP shut down the federal government out of pure selfishness and spite: they lost the fight over the ACA, they lost the 2012 presidential election, they're the minority party in power, and yet they believe all of this is irrelevant and that if they yell and scream and stomp their feet enough the President and the party in power will simply give int to their completely irrational demands, much like a small child expects to get all the candy it wants by throwing a tantrum in the checkout line.

And if this is the route they're going to go down, then it seems pretty clear the President has only one real option: to not give in, to not capitulate, and to show the screaming child that such inappropriate behavior will not elicit the desired outcome - no candy for you, little screaming monster.

To do otherwise, as most parents already know, is to give the child carte blanc to continue to engage in such disruptive behavior, at which point the battle is lost.

Don't forget the teabaggers are Ayn Rand fanatics.

Rand's books always contain a part where the protagonists (i.e., freedom-lovin', hard-workin', bootstrappin', capitalist heroes) reach a point where they feel they can no longer stop the evil liberals from forcing them to accept equality and they blow up their own property in a show of "if I can't force you all to do things my way, then no one can have it!" righteousness.

One of the requirements for admission into Galt's Gulch in Atlas Shrugged was that the person had to destroy everything they owned back in the "Real World."

The teabaggers might have reached that point where they think blowing up the whole government is the only option they have left.

@5 correct. I want to say "screw those guys for voting republican" but I still don't want to live in a bifurcated country and I don't want children and poor people to suffer unnecessarily. It is that compassion that makes me a lousy negotiator.

First thing first, stop the crazy. Limit the avenues that crazy people have to make others crazy, to promote crazy, to revel in crazy. You fight fire with water.

as i heard on NPR this morning: Obama and Reid want this shutdown, they won't negotiate, they won't compromise, the GOP has passed bills for this or that funtion that one of their constituencies wants, default won't be that bad, we can service the debt and just not fund things the tea party doesn't like.

the GOP controls the House, and the House controls the budget. they're not powerless. edwin meese planned this well.

I bet your coworkers and ex wife might know something about it.

Interestingly, then Senator Barack Obama voted AGAINST raising the debt ceiling casting 'No'. It passed by only a FOUR point margin. What comes around goes around in Washington D.C. Obama is a duplicitous liar. Thank God I voted for John and Sarah and then for Mitt and Paul.

Why not at least consider when/if sitting at the bargaining table having something to bargain? just confronting them with the baseline against their many stupid things to cut isn't bargaining. That is, show up with gun-control, voters-rights, womens-health initiatives, minimum-wage, immigration reform .... then: "so ok, you drop your opposition to the ACA and we'll table voters-rights (for now); otherwise no deal!" that's how bargaining is done, or at least appear more traditional and sensible.

@15: Reid has said, and Boehner has admitted, that they HAD A DEAL: the Senate accepts a budget $70 billion lower than they wanted, and the debt ceiling is raised.

Boehner reneged. because he does not control his caucus.

Obama has finally reached the same conclusion that Neville Chamberlain did when Hitler tore up the Munich agreement only six months after it was signed. Let's hope that he's not in the same weak position as Britain and France were when they finally decided that enough was enough.

@16: Conversely, you can think of someone as saying "Thank God I voted for Gore in 2000." People don't regret their choice just because their choice lost.

@23: Sorry, but the false equivalency is your opinion. Logic dictates otherwise.

If the context is the conviction of the voter, then my statement (@22) is correct. It doesn't matter what you think of the voter or of the candidate the voter chose.

#2

Why do you assume that. Many libertarians are firmly against the QEs and financial manipulation, and wouldn't care about a DOW anything except what the market fairly values it at.

Negotiate with crazy? It's an abusive relationship with crazy. Can't get out of a loveless marriage because of the kids, so sometimes it's better to let them fly their crazy in public to show everyone they have 'Issues'.

Kids, don't fuck crazy.

@26 Because libertarianism is mostly a shallow form of anarchy for those in dad pants?

Default is not on the table. Stop being sheep.

If/when the debt limit is hit, $14 billion-ish per day in revenue will still flow in.

The Treasury Dept will prioritize payments to bondholders, pay the next highest priority claimants in the order determined by law & administration policy, and everyone else gets in line for when cash is available.

That's not default. It’s a forced spending cut. It may be highly disruptive, but it's not even close to defaulting like these hacks keep braying.

@29: You really ought to be Secretary of Treasury, handling the calls from Social Security recipients when you decide to stiff them so you can cut checks to the Chinese central bank. You can tell them, "Hey, this isn't a default. It's a spending cut. And you can tell your landlord I said that." (BTW, there is no "prioritization" law or policy. Because no one, other than the Republicans of 2013, think the US should default on any of its obligations--obligations that the Congress incurred.)

@29

The fed would have to write an awful lot of software in the next week to do the sort of prioritized settlement you've outlined there. I think you might not have a very good understanding of the volume of notes and bills (and repo, in the modern QE world) that the Fed handles every day.

And that "everyone else gets in line" part, that's what's called a "liquidity crisis." Which would be at least as damaging as outright default (an unprioritized default might proportionally affect parties better to able to absorb the loss, while prioritized liquidity cutoff will more or less by definition affect those least capable of coping with it).

@18

Because one of the explicit roles of federal government is feeding and providing medical care for its citizens, damn it! Says it right there in the Constitution! Somewhere!

If Congress finally saying no to Barak 'drunken sailors ain't got nothing on ME!' Obamas insane spending sprees means you don't eat, tough. Get a job. The shutdown isn't your problem, you are.

Oh SB, always full of shit, aren't you?

IT'S A REPUBLICAN BUDGET, STUPID. Boehner is blocking your dream budget.

This is not about spending. Ya ass-backwards git.

@34 She is at least consistent, never lets a fact get in her way.

@34

Actually, it's not a budget at all. What's on the table is a Continuing Resolution: i.e., a bill to keep the sequester going (at a funding level proposed by Republicans).

The Republican budget, such as it is, is the Ryan plan passed by the House in April (which would repeal the Affordable Care Act).

@ 36, thanks for the clarification.

@32: With respect, I think you might not have a very good understanding of how government payments work.

I presume when you say 'fed' you mean the Federal Reserve (http://www.federalreserve.gov/). They manage the money supply of the United States and are a quasi-independent entity.

The Department of the Treasury (http://www.treasury.gov/) is a department of the executive branch and writes the checks for the federal government.

The Treasury issues something like 30 million payments per day, I believe. They have contingency plans in place for this kind of situation, despite what you may have heard being scaremongered on Sunday morning talk shows.

A liquidity crisis is very different from a payment delay. Lockheed Martin, for instance, may suffer a liquidity crisis on a corporate level if an anticipated multi-billion-dollar check for bombers gets delayed, but that doesn't affect the money supply or market for government securities.

@38 How do you think the bond market will react when the treasury starts picking and choosing which bills to pay? You think our borrowing costs will go up or down? If you stop paying your credit card bill and your electric bill, you think you can go to the bank, ask for a mortgage refinance and say "don't worry about all those payments I've missed; I've always paid YOU on time!"

@38: Borrowing costs will go up, though I suspect not materially. Honestly, bondholders don't give a shit if your grandma is eating dog food and reusing insulin syringes 20 times, they worry about getting paid.

The people waving their arms about the world ending if we can't issue new debt are the same ones who assured you a comet would destroy life on earth when the sequester cuts hit. Barry should cut a deal and work on the midterms. In my opinion.

Um, I answered myself. I meant @39. G e n i u s.

You don't negotiate with crazy. Period. Stand your ground, President Obama!

@38

Ah, OK. So the the bits you don't understand are why we have overnight lending, how much, how often, and what instruments the Treasury transfers with the Fed, what Treasury payment delays would do to liquidity in the money markets, and what it would mean to suddenly throttle that liquidity.

In other words, you've got some understanding of Macroeconomics, but nobody has ever bothered to explain Finance to you, or why it's important.

@33: The federal government isn't providing medical care to its citizens. Rather, it is mandating that everyone get health insurance and offering insurance subsidies to those judged to need it. Ensuring that everyone is able to receive medical care when needed, resulting in lower medical costs and a healthier populace? I think that falls under the Taxing and Spending Clause: "The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common defence and general Welfare of the United States"
No comeback to that, bitch.