The key actors in the drama are the Representatives. I expect what will affect their behavior most is call-ins from constituents rather than the media or the polls.

The Representatives feeling the most heat will be those where there are lots of federal government workers: Maryland, northern Virginia, Albuqurque, and a few other places. Since these are likely mostly Democrats, there will be few Republicans that are likely to defect.

The markets and the Chinese don't seem to be too concerned that a default on our bonds will happen. If the Chinese, who hold a trillion dollars of our debt, thought they were going to get stiffed, they would be dumping a few bonds now to roil the markets and send a signal.

I suspect that if Republicans are getting heat from constituents, we would be hearing about it now.

My prediction. No deal will happen. Thursday will roll by with no default on our bonds and the Republicans will be a lot stronger for having held out.

I just hope the interest rate doesn't rise. Last thing I want is hyper inflation. I honestly hope there is some sort of anti-incumbent movement. If there was any time for a third/fourth party to show up, now would be the time, and it has to start grassroots.

Ugh. I just need to stop thinking about it.

With how globalized the US has become, hyperinflation isn't really an option, as it would create a bit of a fiscal vacuum on all those whom we owe our debts to. This may be the conspiricist in me, but it seems as though the key parties involved are actually striving for a default, possibly to renegotiate to a lower amount of debt owed to each of the key parties of which we owe, using worldwide recession as a bit of a bargaining chip.

"This may be the conspiricist in me, but it seems as though the key parties involved are actually striving for a default, possibly to renegotiate to a lower amount of debt owed to each of the key parties..."

This might seem a good deal to some people, but it would have grave consequences. The world's trust in America and the dollar would be lost for decades. Central banks would soon replace dollars by yuans, swiss francs or yens in their reserves. The US treasury bills, govt. bonds would lose their AAA ratings (even at Moody's), and key foreign players (from China to Europe) would try to replace these as THE risk-free asset in portfolios.

As long as the world lends to the US at generous rates reflecting their trust in the US govt, the burden (interest) on these might be insignificant. However, as soon as that trust is gone, the world economy might be transformed in a way that would not be acceptable for any politician.

Obama has the power to pay the interest on our debt and the federal gov pulls in a lot more money a day than it owes in interest. It's a bunch of show this whole default thing.

I think the Dems are hoisted on their own petard here.

Oh and chase I guess you missed the '10 and '12 elections.

"Another thing that freaks me out is time. Time is like a book. You have a beginning, a middle and an end. It's just a cycle."

-Mike

I'm just feelin' a whole pre-WW2 Germany kinda vibe here, and I'm not liking it.

On CSPAN they just announced that Boehner is not going to block the vote on the Senate plan that was announced this morning. With the current liquid timeline, the vote is looking like it's going to happen late tonight or early tomorrow. The end of the shutdown may realistically be in sight.

But what I'm looking at is the repercussions of this fiasco. Now would be the opportune time for a third party to emerge and force a complete paradigm shift of our current political system.

These are truly exciting and/or terrifying times, friends.

@Cambria + Fcuku: A third party with some fresh faces would be truly exciting - but the huge problem is that the first-past-the-post voting system would usually work against emerging third parties.

Political scientists call this phenomenon 'Duvenger's law'. When the new party is still unknown, people would not vote for its candidates (even if they'd like them more than the two main candidates) because they would think that a vote on a 3rd party candidate is - a vote lost as they're "never gonna make it".

However, if they are not able to send representatives to the Congress, they would not be to gather enough money to advertise themselves either. Since overcoming these initial hurdles is incredibly hard and the process is really slow, many party supporters and members would get disappointed and leave. The initial momentum would soon be lost.

What they could do is join the party that is more acceptable for them and trying to reform the system from within. Ron Paul has tried this route, but we can see from his example that it's not that easy either.