The Weekend the Debt Ceiling Debate Ends (if We're Lucky)

The latest news on the debt ceiling has been feeding to our Countdown to Default live blog, but here are four thoughts to hold you over for the weekend.

1) The first and last thing to say about the debt ceiling is that it's an unfortunate example of American exceptionalism. Most countries pass laws, use taxpayer money to fund them, and borrow to cover the difference. They don't conduct an additional poll within the legislative branch every year to reaffirm already-affirmed spending. But we do, thanks to 1917 law to help fund World War I.

2) When people ask "Are we like Europe?" then answer is no, but we're might choose to be, by failing to raise our debt limit and purposefully defaulting on debt we can afford. See the difference between our 10-year debt yield and Greece's? Ours has fallen to 3%, and they're grown to 18%, but we still might technically default first!

3) The president sounds like he really wants a deal to mitigate the salience of the deficit (and tax increases) in 2012. Republicans say they would prefer to raise the debt ceiling with cuts rather than grant the president the unilateral right to raise the limit himself (ie the McConnell Plan). An overlap solution would provide for about $1 trillion in cuts, basically no tax increases, and a vote to avoid default.

4) That leaves taxes and a broader deficit deal on the docket for the next few years. Which, frankly, is where they should be. Politicians shouldn't hold hostage the last decades' debt while they negotiate the next decade's budget. Whether or not means-testing Medicare, chaining CPI, cutting defense, or raising taxes is smart, it has nothing to do with the debt ceiling.