Debt Ceiling: Damage Already Done?

UPDATE: Twitter now blowing up with reports that everything is totally effed up.

Moody’s is warning that it will consider downgrading the U.S.’s AAA rating on the grounds that it now “considers the probability of a default on interest payments to be low but no longer to be de minimis.” Schumer:

This is a reminder that the deadline for these negotiations may not be as far away as August 2 or even July 22. It’s whenever the credit markets decide it is. We need to come to an agreement immediately because the irreversible consequences of a potential rating downgrade could occur ahead of an actual default.

Nate Silver shows that the Republicans don’t even have the support of their own voters on this. And here’s Ezra Klein:

Whether you believe this depends on whether you believe that catastrophic delay on the debt ceiling would hurt Obama or the Republicans. Political scientist John Sides says Obama would pay the price. “Presidents suffer the consequences of a bad economy,” he writes.

That’s true. But I don’t think the aftermath would read to voters as “a bad economy.” I think this would look more like calculated economic sabotage on the part of the Republicans. Wall Street would turn on them. The business community would turn on them. The media has already turned on them. And as Social Security checks stop going out and doctors stop taking Medicare because the federal government isn’t paying its bills, the public would turn on them, too.

And Jonathan Chait: “Meanwhile, the evidence that’s leaked out about internal Republican deliberations suggests the Republicans are not shrewdly trying to maximize their leverage. They’re just barking mad.” And Kevin Drum: Yes, The Tea Party Is Insane.