A plausible scenario for how America defaults

Ezra Klein says Cantor’s refusal to continue participating in the budget negotiations sets in motion “a plausible scenario for how America defaults.”  Klein writes:

One analysis of the House GOP right now is that there are three players who can cut a budget deal: Eric Cantor, John Boehner, and House Appropriations Chairman Hal Rogers. One of them is going to have to do it. Which means one of them is going to lose his job.

Cantor seemed the most obvious choice because he has the most credibility with the Tea Party. But that very credibility with the Tea Party is why Cantor won’t cut the deal. They support him because he’s the guy who won’t cut the deal. He can’t sign off on tax increases without losing his power base. But if he’s able to throw it back to Boehner, and Boehner cuts the deal, that’s all good for Cantor: Boehner becomes weaker and Cantor becomes stronger. Which is why Boehner will also have trouble making this deal. It’ll mean he made the concessions that Cantor, the true conservative, didn’t. That’s not how he holds onto the gavel in this Republican Party.

If you had to write a plausible scenario for how America defaults on its debt, or at least seriously spooks the market, this is how it would start. After insisting on using the debt limit as leverage for a budget deal, the Republican leadership finds they can’t actually strike a deficit-reduction deal, but nor can they go back on their promise to vote against any increase in the debt limit that isn’t accompanied by a deficit-reduction deal. 

Of course, if Obama caves on the tax issue, Cantor, Boehner and the Tea Party nuts can all go home happy.  If Obama doesn't cave then Cantor or Boehner or someone has to anger the Tea Party nuts and suffer the consequences.  Will Republicans do what is right or what is good for their political careers?  What do you think?  My bet--they protect their careers and say, to hell with the country.

Read Klein here:  http://www.washingtonpost.com/blogs/ezra-klein