The debt ceiling will be raised. There's no doubt about it. Like the TARP deal, however, it's going to take some major signs of collapse, such as a market nosedive, to get the players back to the table to hash out a "deal." Only there won't actually be a deal, because the Republican hard-liners realize they don't need to give our President a single thing. His idea of compromise is to offer more and more until the other side has exactly what it was demanding in the first place. And if they then hesitate (since by now they realize this guy is the perfect mark), he'll be happy to offer even more than what they originally wanted. His pathetic gaffe, "call my bluff," says it all. He thinks he's negotiating while it's obvious to everyone else that he's simply being had.
So yes the ceiling will be raised. And what then? After the dust clears we'll all look around us and wonder what the HELL has been accomplished after all these months of pointless and destructive dickering. For what? Why was it so important to raise the debt ceiling in the first place? So the Republicans could humiliate Obama and trash the social contract? And what did the rest of us get in return. What did the Democrats get? What did Obama get?
Lemme guess: preservation of the "status quo." It's a bit tarnished, you gotta admit. The Republicans will have taken huge chunks out of it. But after the dust settles the fundamental illusion will still be there, the fantasy of the "free market."
Wake up, folks. The "free market" collapsed back in 2008. Or, more accurately, it revealed itself as the delusion it always was. The notion that we can somehow reverse history and return to a "status quo" that was never anything more than a mirage is wishful thinking at its most destructive. So when the dust clears where will we be? Back where we started, with a series of intractable and seemingly insoluble problems, both economic and social. The only good thing about all the huge budget cuts emerging from this unholy "deal" in the making is that it will make things so much worse that it will no longer be possible for the majority of our citizens (I prefer this term to "taxpayers" or "consumers") to dream on as though nothing had really happened.
But failure to raise the debt limit would be infinitely better in this regard, a healthy bucket of ice cold water poured over the heads of a bunch of lazy dreamers: "do we really have to get up and go to school? Can't we just lie here all day?"