NEW YORK (
) -- Compromise is suddenly in the air, judging by the robust nature of the morning's markets. What's happened? I think the debate out of Washington somehow has gotten switched in the last 24 hours. It's gone from some faux handwringing about whether the Japanese or Chinese will still buy U.S. bonds to a recognition that the whole reliability of the U.S. -- as a provider to its people, and not just its debtholders -- must now be called into question.
In other words, finally, and perhaps not a moment too soon -- and maybe not soon enough if we don't see a thaw today -- this debt-ceiling issue has crossed Wall Street onto Main Street. That has even the most doctrinaire of elected leaders worried about losing their jobs.
How do we put this reliability quotient in perspective? Let's say
had advertised that its planes work 100% of the time and everyone had gotten used to that thinking and we had grown comfortable with the reliability of the plane.
Then imagine that, one day, Boeing had said its planes were guaranteed to work 95% of the time. Would you ever fly in a Boeing plane again?
That's pretty much the analogy that my old friend Chris Matthews laid on me last night when I invited him on
to explain to me what he thinks could happen if the country defaults on its debts. He thinks no one will ever trust the country again on anything financial. Social Security checks may
be in the mail next month, Medicare wouldn't be expected to pay doctors in a timely fashion and the Chinese would be sellers of our Treasuries, because the only reason they are buying our paper is its reliability. You take away the reliability, you take away the reason for owning. Who needs Treasuries if the only reason you are buying them is that they had been 100% reliable, and now they no longer are?
It's because the possibilities are that grave that Chris believes something can happen by next Tuesday to break the logjam, and that the stirrings Thursday could be for real. The movement, he says, will ultimately come from the Senate. The White House can't afford to negotiate after President Obama's statement that he won't negotiate, and House Speaker John Boehner has said that if Obama's not negotiating, he's not going to negotiate. Chris believes that everything has gotten pushed along by Congressman Paul Ryan's reasoned piece in Wednesday's
Wall Street Journal
, which argues for some substantive dialogue on the budget and not hysterics about the debt ceiling.