I see little if anything to quibble with in Ezra Klein's WaPo piece where he suggests that the President's decision to "go public" in his criticism of Republican Congressional leaders for their refusal to include tax increases (any tax increases at all) as part of their price to agree to expand "the debt ceiling," which now seems to have some kind of a consensus deadline of early August before "really bad things happen," means, ineluctably, that "the negotiations have failed."
Ezra notes that the hang-up seems to be the President's demand for around $400 billion in tax increases (against the $2 trillion in spending reductions already agreed to). The usual suspects are trotting out the "class warfare" rhetoric on the one hand and the "private jet" rhetoric on the other. And Ezra notes that neither "side" is really seeking to do much more now than pitch blame for failure to the other side, when the excrement hits the air circulating device... in about a month or so, if that far out.
No one is, of course, thinking about the consequences themselves... only about their political pitch (to raise campaign funds!) Of course, for "the consequences" of fiscal irresponsibility, we need look no further than the birthplace of democracy, where austerity votes and riots seem to coexist symbiotically. We seem to think that our ready access to low-quality starchy foods and anti-depressant medication will keep our overweight and unhealthy population from revolting in the face of similar indignities and austerities to be foist upon our nation by our financial overlords... maybe so... or maybe not.
If I had to guess at an outcome, it would be that Team Obama will try to recast its waving of a white flag as "statesmanship", and politely beg Messrs. Boehner, Cantor, McConnell, Kyl et al. to come back to the White House, and then the President and his party can capitulate to an all-spending-cut scenario for a debt-ceiling enlargement... the same way this White House seems to have apparently capitulated on so many other things that the President (and his financial supporters/future employers) actually really wanted, but his nominal electoral base regarded as anathema (such as an extension of the Bush tax cuts, tax cuts in lieu of stimulus, Guantanamo, no "public option" or enlargement of Medicare, "state secrets," endless wars, and more Bush tax cuts).
But that's only a guess (largely predicated on the truism that "nothing ever happens in August.") The fact is, members of our political class (and its senior partner, the financial class) are really recklessly indifferent to the plight of the peasants (and the peasants are defined as just about anyone with a family net worth of less than ten million dollars or so)... recklessly indifferent enough to trigger a financial catastrophe akin to the aftermath of Lehman in 2008, magnified to some as yet unknown power (given that the world's financial and economic fundamentals are worse in every department since 2008). Short term financial thinking and business practices now meet up with short term political thinking... I'm also going to guess (with somewhat more confidence than my other guess) that, whether it happens this year, or next, we're going to get that 2008 financial meltdown redux, followed by a lengthy and unpleasant shake-out period.