The presumably upcoming vote on raising the debt ceiling is the big news story of the US today. Personally, I think they should just go with an up and down vote, but there is all these messy fights about wanting to attach conditions to the debt ceiling. Despite the ugly political fights, however, I have a feeling that things will go like this:
- The August 2 deadline will continue to approach, with no end in sight to the debt ceiling fight. In fact, Republicans will make increasingly outrageous demands, making it seem even more likely that the United States might default on part of its debt.
- With the huge amount of uncertainty and fears of a default by the United States government, the stock market will plummet drastically near the August 2 deadline.
- Goldman Sachs will make a killing with all the shorts it would have made. Right before the deadline, they will also buy up a whole lot of stock at rock bottom prices.
- In a dramatic vote immediately before the deadline, Congress will agree to raise the debt ceiling. Republicans may or may not be trying to deliberately cripple the American economy for working class people for their own political benefit, but they would never be allowed to actually block the raising of the debt ceiling. Goldman Sachs might like destroying parts of the economy to gather wealth from shorts, but even they might balk from a default which could threaten the wealth of even the incredibly rich.
But what do I know? I'm just a poor, cynical guy with no first-hand experience with the inner workings of any political or financial system, who probably has no idea what he is talking about.