Barney Frank is on Maddow’s right now saying that a large number of Republicans in the House have “a serious problem with reality … invincibly ignorant.” It’s a great rant, and if you missed it I’ll find the video and publish it here.

There are reports that President Obama and Speaker John Boehner are close to working out a deal, and other reports saying those reports are wrong. So I’m not even going to comment.

Moody’s Investors Service put five states on notice that they’ll be downgraded if the federal government is downgraded, because the states are dependent on high federal employment or have a high percentage of citizens on Medicaid. The states are Maryland, New Mexico, South Carolina, Tennessee and Virginia. Maddow says that the governor of Virginia has suddenly changed his tune about the debt ceiling and wants it raised asap.

As we hurtle toward financial Armageddon, it feels sad and poignant to read that the space shuttle program has completed its final mission and will now be shut down.

“A permanent marker will be placed on the runway to indicate the final resting spot of the space shuttle program,” the news story says. They might as well add “America RIP.”

The first moon landing happened just a few weeks after my high school graduation, so I remember it well. Then, it seemed there was nothing America couldn’t do. Now, as the lemmings continue their lunatic efforts to drown government in a bathtub, America can’t do anything.

Here’s another news story that metaphorically captures our current predicament. Some bleeping fools visiting Yosemite National Park ignored warning signs and climbed over a guard rail to wade in a river, and shortly thereafter were swept over a 317-foot waterfall to their presumed deaths. Their bodies haven’t been recovered, but the Park Service says that’s often the case when people go over that waterfall. They were all in their 20s.

(One member of the same group who managed to not get swept over the falls was wading around carrying his seven-year-old daughter, who witnesses say was screaming in terror. The guy found his daughter’s terror amusing. I hope law enforcement figures out who this guy is and at least cites him for endangering a child.)

The three waders who were killed were “goofing around” in the water, lost their footing on wet rocks and slipped into the current. Witnesses say their faces reflected absolute terror as they went over the falls. This is tragic, but I couldn’t help but think — did it not occur to them this could happen? Did they think the warning signs were just kidding, and the barriers were just for ambiance?

In Washington, House Republicans have formed a suicide squad and are refusing to even consider any deal on the debt ceiling issue that includes revenue increases, or any deal, period. This is in spite of the fact that a group formed of some of the nation’s wealthiest citizens is begging the House to raise their taxes rather than default.

This group is making the mistake of citing patriotism as their motivation for wanting their taxes raised. Foolish, foolish wealthy people. Patriotism is just a pretty word to wingnuts. The truth is (and they no doubt realize this) that they are likely to take a bigger hit in the long run if the nation defaults. And that’s what they ought to be telling the bleeping fools goofing around in Congress.

However, many reports say that House Republicans have been subjected to many many briefings explaining the consequences of default, and it has not mattered. No matter how dire the warnings that their goofing around could have catastrophic consequences, the House Republicans either don’t believe the warnings, or they do believe the warnings but think that, somehow, going over the falls will be to their advantage.

And why wouldn’t they think that? They’ve gotten away with such shenanigans in the past, such as with the stimulus package. The President let himself be blackmailed into weakening his own legislation, and when the stimulus did not deliver a big splashy, tangible improvement, the Republicans got away with persuading the nation that the package hadn’t worked at all, even though it did.

They’ve also gotten away with continuing to scare the nation about the “failure” of “Obamacare,” even though (well, because) most of the legislation hasn’t even kicked in yet, so it can’t possibly have failed yet. Now they are blaming the high unemployment on health care reform. Seriously.

Anyway — Nate Silver is saying that no one would win the “blame game” if the nation defaults. However, he is inclined to think the House Republicans would be hurt the most.

People who say otherwise argue that, historically, presidents get the blame for a bad economy, whether it was their fault or not. The economy is very complicated, and generally effects of particular policies are not immediately felt or well understood by the public. But as Nate says, nothing like the possible default has ever happened before, and at least some of the effects will be dramatic and immediate.

The stock market could drop by thousands of points. Some major corporations, particularly in the financial services sector, might go under. Although the consequences might take some time to filter through the broader economy, there would nevertheless be a number of immediate and extremely visible effects. Many voters would feel as though they had perfectly reasonable grounds to connect the dots.

So there you have it. No amount of warnings will persuade some people. They won’t realize the mistake they’ve made until they are going over the falls.

I still hold out some hope that sometime next week, as the stock market plummets in anticipation of default, some parts of the suicide pact will realize that the death thing is really, really bad after all and will change their minds. I also hope someone in the White House is preparing a legal justification for the constitutional option, if it comes to that. But at this point I don’t think a deal is possible.

Joe Biden’s Gang of Six has reconstituted itself and resumed negotiations. Yesterday outlines of a compromise agreement were made public; Ezra Klein comments. Among other things, Ezra says “The plan also appears to build the expiration of the Bush tax cuts for income over $250,000 into the baseline.” We don’t know details, however.

Steve M says the plan is DOA in Grover Norquist’s House. See also Steve Benen, “When the Gang of Six Meets the Gang of 435.” It’s way doubtful any form of this plan will pass before the August 2 deadline.

Some news stories say that President Obama praised the current Gang of Six proposal, but Steve Benen says that’s not exactly what happened. Instead, the President praised the G6 for making progress, then added,

“So here’s where we stand. We have a Democratic President and administration that is prepared to sign a tough package that includes both spending cuts, modifications to Social Security, Medicaid and Medicare that would strengthen those systems and allow them to move forward, and would include a revenue component. We now have a bipartisan group of senators who agree with that balanced approach. And we’ve got the American people who agree with that balanced approach.”

This sounds like a message to House Repubicans to stop standing in the way. But I doubt they’ll listen.

So where does that leave us? Earlier this week Bill Clinton said that if it were up to him, he’d evoke the 14th Amendment and raise the debt ceiling himself. I’m not sure how constitutional scholars feel about that, though. And I take it the White House really doesn’t want to go there.

A lot of editorialists are still assuring us that of course the debt ceiling will be raised, but I’m having doubts.

See also:

“Corporate America’s Sunshine Patriots.” “… as of last week, as per the website Zero Hedge and data analysts Capital IQ, 29 public companies — including Bank of America, JP Morgan Stanley, Goldman Sachs, GE and Warren Buffett’s Berkshire Hathaway — each have more cash on hand than the U.S. Treasury.”

“Why Can’t We Dump the Debt Ceiling?”

There’s a story getting buzz this morning that Michele Bachmann is subject to incapacitating migraines and that she takes a lot of medication to manage this condition. Which explains a lot, if true.

However, this story — which is heavy on innuendo — is coming from Tucker Carlson’s Daily Caller. Very interesting. Might this be the Republican establishment’s way of taking Bachmann down early? I’m sure the PTBs don’t want her to be the nominee, and they don’t want her around to take the air out of the real nominee’s campaign. Steve M. recalls that the Bush campaign tried something similar against McCain in 2000, putting out stories that suggested he was unstable because of his POW experience. Which, come to think of it, explains a lot.

Joan Walsh tries to make two points in this column, and I say it’s partly on, partly off.

First, she comments on a talk between President Obama and some Boston college students. The President said that he was being derided both as a crazy left-wing Marxist (from the Right) and a right-wing tool of Wall Street (from the Left). These both can’t be true, he said. Then he brought up the Emancipation Proclamation. Walsh writes,

Obama explained that even though Lincoln opposed slavery, his Emancipation Proclamation only freed the slaves in states that were fighting against the Union; it didn’t apply to slave states that were Union allies. Obama’s not pointing that out to call Lincoln a hypocrite or malign his commitment to eradicating slavery; he’s describing it as a savvy pragmatism, a leader understanding the limits of his time. “Here you’ve got a wartime president who’s making a compromise around probably the greatest moral issue that the country ever faced because he understood that `right now my job is to win the war and to maintain the union,'” Obama told the students.

I agree with his assessment of Lincoln’s values, and Lincoln’s cautious pragmatism. But then Obama went a little too far.

“Can you imagine how the Huffington Post would have reported on that? It would have been blistering. Think about it, `Lincoln sells out slaves.'”

Walsh thinks Obama went too far because, in fact, many northern editorialists of Lincoln’s day did blast the Emancipation Proclamation as a betrayal and sellout of the Cause; and the Huffington Post isn’t really a mouthpiece of the Left, but a commercial website.

Walsh is right about the Huffington Post, and the President’s statement would have been more accurate if he had cited, for example, FireDogLake. But this does not negate the President’s larger point, which was that the abolitionist purists of Lincoln’s time hated the Emancipation Proclamation because it fell short of what they wanted. The Emancipation Proclamation was to abolitionists what the Affordable Care Act came to be for the firebaggers.

I don’t want to get sidetracked here about the political reasons the Proclamation was written the way it was written. Most of you know about that, anyway. I’ve brought up before that abolitionist leaders opposed Lincoln’s nomination for the 1860 presidential election, because he wasn’t “pure” enough on the slavery issue. Lincoln was willing to compromise and protect slavery in the slave states, in exchange for preserving the Union, and the abolitionists weren’t having it. I don’t recall if there was another candidate the abolitionists rallied behind, but if there was, he wasn’t Abraham Lincoln.

And the moral is, sometimes holding out for “perfect” is stupid. Sometimes you gotta go with what you can get. And sometimes, events take over and go in their own directions in ways that leaders didn’t anticipate. Emancipation finally happened, less because of but in spite of Lincoln’s plans when he entered office. A series of compromises and unforeseen events freed the slaves; Lincoln was just an instrument.

This is not to say that I think President Obama’s political and policy judgments are always right, but neither do I think his policy compromises represent the policies he wants and planned for all along, as some among us brainlessly rant.

So Walsh mostly misses on that one. But she’s right about her next point —

But there’s a deeper problem here: The fact that pundits and talking heads have become a stand-in for a politically engaged left. I watched GOP macher Grover Norquist on “Hardball” Monday; he was terrible. I realized I hadn’t seen much of Norquist on TV before, and he’s really not very good at it. But why should he care? By forcing his no new taxes pledge on Republicans, via Americans for Tax Reform, he’s become one of the most powerful men in the country. I’m trying to think of Democratic activists who have had a comparable impact their party, and I can’t. Instead, the relationship of the Democratic base, and progressives, to Obama and to his constituency is weirdly defined by talking heads, whether Huffington or Keith Olbermann or Rachel Maddow or Chris Matthews or the welcome new addition, perhaps temporary, of Rev. Al Sharpton to the MSNBC lineup.

Walsh is right that there is no progressive version of Grover Norquist who can somehow bend Congress to do his will. That’s not necessarily a bad thing; it reflects the fundamental difference between those in the U.S. who call themselves “conservative” these days, but who are really reactionaries, and progressives. For all their blathering about “liberty,” the reactionaries are authoritarians, and the base is made up of blind, besotted followers.

The right-wing movement in the U.S. is being orchestrated by a few very powerful individuals in a way the American Left is not. Righties always whine about George Soros, but Soros is just a (somewhat erratic) source of funding. He’s not a grand initiator of movements, nor is he trying to manipulate the public and the government in the same way that Norquist, the Koch brothers, and the other elites of the Right do. So no, there is no progressive equivalent to Grover Norquist.

Progressivism doesn’t have leaders, exactly, and on the whole progressives make really bad followers. We may rally behind someone for a short time, but we rarely stick to anyone for more than a few weeks or months. There are some politicians and media celebrities — Bernie Sanders, Rachel Maddow, Paul Krugman — that we continue to admire, but such people tend to appeal to our intellects; they aren’t necessarily forming us into a movement that is actually going anywhere.

So although it has its cracks and fissures, the Right is much better at working to a single, directed purpose than the Left, which makes it more effective. But I’m not sure there is any way to change that. Progressives just don’t do the queen bee-worker bee thing nearly as well.

The White House let it be know that the “cut, cap and balance” scheme would be vetoed if passed. Sam Youngman, The Hill: “In a statement of administration policy, the White House Office of Management and Budget labeled the GOP bill as an ’empty political statement.’ … The president’s veto threat was followed by a full-on assault from administration officials who blasted the GOP proposal as ‘extreme, radical [and] unprecedented.'” Well, yes.

See also “Poll: 71% shun GOP handling of debt crisis.”

Update: Dean Baker writes that there’s no way Wall Street would let the Republicans pull the debt ceiling trigger.

As many have noted, including me, a default on the debt would be an absolute disaster for the financial system. We would see the same sort of freeze-up of lending as we did after the collapse of Lehman in September of 2008, although this time would almost certainly be much worse.

With US government debt no longer the rock-solid pillar of the world financial system, banks would instantly lose much of their capital. They would not only have to write-down the value of government debt, but also all the assets backed by the government, like mortgage-backed securities issued by Fannie Mae and Freddie Mac.

This would almost certainly push the major banks into insolvency. JP Morgan, Citigroup, Goldman Sachs and the rest would suddenly be back in the welfare line. And any rescue would almost certainly not restore them to their former strength and profitability like the last one did. If the government defaulted on its debt, Wall Street would take a shellacking and it would never again be the centre of world finance.

For this reason, Baker says, no one believes Republicans in Congress will allow the U.S. to default. They may be willing to kick poor and working people in the teeth and let seniors rot, but they aren’t about to displease the people who finance their election campaigns.

This makes sense, but it’s congressional Republicans we’re talking about. Baker assumes a majority of them are sane enough to understand the consequences of default. I’m not sure that many of them do.

Update: Wall Street Journal proves Keynes was right.

I’ve got about five minutes to blog this morning, so … I want to call your attention to a column by David Leonhardt in the New York Times on the way forward for the economy. It makes sense to me, but let me know what you think.

Reid Wilson reports for the National Journal that GOP congressional leaders are trying to educate House freshman and other death-eaters that the debt ceiling really does have to be raised, like it or not.

Privately, House Republicans have been driving home the message that a failure to increase the debt ceiling would be a disaster. Sources said Boehner has been “aggressive,” in one aide’s words, in articulating the need to reach a deal.

In a presentation to the House Republican Conference on Friday, Jay Powell, a former Under Secretary at the Treasury Department under George H.W. Bush and a visiting scholar at the Bipartisan Policy Center, laid out just what would happen if a deal isn’t reached.

On August 3, according to Powell’s presentation, the federal government would be on the hook for $32 billion in committed spending, including $23 billion in Social Security checks, $500 million in federal worker salaries, $1.4 billion owed to Defense Department vendors and $100 million in refunds the IRS owes to businesses. On the same day, the government will take in only $12 billion in revenue, giving the government a $20 billion cash deficit. By August 15, when the federal government is on the hook for a $29 billion interest payment, the cash shortfall will have grown to $74 billion—and possibly more, if interest rates on U.S. debt rises.

In other words — you’ve had your fun posturing on Fox News, boys. Now it’s time to get serious. Whether the pea-brains can be educated is an open question, of course

I watched the President’s press conference. If his intention was to hang the debt ceiling impasse around the necks of the GOP I’m not sure he was successful. I say this because afterward the MSNBC talking heads were mostly droning that the President needs to put a deal on the table. Huh?

The first question, from Jake Tapper, was about what the President was willing to sign off on in the way of budget cuts. The answer was a bit droning, but the President listed a number of specific cuts he said he would consider as part of a balanced package. In other words, he refused to give anything away without knowing what the other side was going to give away, which is smart. He’s not promising anything without seeing the total package. This got translated by the bobbleheads as refusing to go on the record of what he would cut. And if that’s what’s on MSNBC, I’d hate to think what they did to it at Fox News.

By now it should be obvious that if the President did put out his own proposed package for Congress to take or leave, the Republicans would vote it down just because it was him proposing it. So what’s the point?

And, anyway, authorizing the Treasury to raise revenue to pay for debts is Congress’s job. Not the President’s job.

I’m sure a lot of the economics bloggers are going to criticize the President for wanting to give away too much, but I think he’s got less room to maneuver, politically, than they appreciate. He’s taking a very “centrist,” meaning what used to be “conservative” in days gone by, position. That may not be policy smarts, but I think that’s where he has to be if the Republicans are ever going to agree to anything that will increase the debt ceiling..

He seemed to me to be firm that he has no intention of extending the Bush tax cuts for the rich again, which is something.