"It was not the Saturday Night Massacre because nobody got fired.
But the Saturday collapse of what looked like a promising bipartisan effort to craft the biggest deficit-cutting deal in American history reduces the already scant hopes for a recovery robust enough to produce the level of job creation needed to rescue the American economy. And that means a lot of people without jobs, fired or not.
The announcement by House Speaker John Boehner, R-Ohio, that he was scaling back his ambitions for the debt talk may carry the same echoes of a Washington on the brink as the Nixon-era firings that advanced and foreshadowed the march of Watergate. Of course, nothing about the shattering of already brittle budget talks compares with the criminality and corruption of Watergate, but for a nation beset by economic misery, a partisan impasse this close to the first default in American history may carry with it a sense of despair and powerlessness reminiscent of the toll Watergate took on confidence in basic governance.
A deal to raise the debt ceiling by itself wasn't going to jolt the lethargic economy back to life, but the resurrection of gridlock creates an element of uncertainty that, at least in the short term, threatens to create a downdraft on Wall Street, higher interest rates, and a consumer psychology even more cautious than it is now.
There is no clear political or legislative path to raising the debt ceiling by the August 2 deadline, and the chances of partial default on U.S. government obligations is now more than just technical. No one is panicking yet. But that doesn't mean they won't or shouldn't.
Ironically, it was Friday's abysmal jobs report that brought D.C. to its latest and most economically volatile budget standstill"..............READ MORE
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