Well then, a global financial crisis has been averted, and the zombie apocalypse will not be with us for at least another few months. Happiness abounds, everyone wins. Except for Republicans in Congress, who appear to have gained exactly nothing from this crisis.
But is that really true? No, hopefully they have learned a few lessons.
One: Don't overreach. As I wrote here about a month ago, the original demands pushed by some Republicans and Heritage Action were too extreme. They made Republicans look unreasonable, and ultimately they backfired. It took Republicans much longer than ought to have been necessary to get to a position that looked reasonable, and at that point it had become far too easy for the administration and its mainstream media allies to paint them as irresponsible.
Two: Don't get tricked into believing that the debt limit is a political tool of extreme usefulness. It is not. It is, in a way, too powerful, like a nuclear weapon. Even though the Obama doctrine dictates that one is allowed to use chemical weapons on occasion, the same does not hold for nuclear weapons. That is not just president Obama's red line; it is, when it come to the debt limit, the world's red line.
Global financial markets responded nervously to the debt limit brinkmanship they witnessed over the past few weeks, and actually breaking through that limit would have done tremendous damage. Claims that these consequences are merely the product of the administration's imagination are unhelpful, both because they add to the risk of actual default and because they lull some Republicans into believing that the debt limit is more like sarin than it really is.
Three: Do not just cave. This counterpart to the first lesson is important to keep in mind as well as Republicans attempt to strike a balance between ultimate policy goals and political realism in the months to come. Taking a strong stand on a variety of issues related to the budget and Obamacare, as opposed to sitting down and negotiating in September without any demands whatsoever, has brought at least one benefit: sequester-level spending is now, more than ever, the law of the land. The full Democrat caucus in both the House and the Senate went on the record yesterday as agreeing to those spending levels, and that is, from a Republican standpoint, a good thing.
So there you go. Assuming no grand bargain is reached between now and January, Republicans will have a beautiful playbook on which to base another fascinating showdown with the administration. Maybe this time around they will remove the debt limit from the debate and stand firm on government funding without demanding that their entire party platform be implemented instantly.
Stan Veuger is an economist at the American Enterprise Institute.
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