Matt Yglesias correctly points out that the Obama administration and the Democrats don't have to be held hostage when the rise in the debt ceiling comes up and he has a plan.
This isn’t a sudden “shutdown.” Nor is is true that we have to default on obligations to our bondholders. Rather, it means that government outlays are now limited by the quantity of inbound tax revenue. But for a while, the people administering the federal government (to wit Barack Obama and Timothy Geithner) will be able to selectively stiff people. So the right strategy is to start stiffing people Republicans care about. When bills to defense contractors come due, don’t pay them. Explain they’ll get 100 percent of what they’re owed when the debt ceiling is raised. Don’t make some farm payments. Stop sending Medicare reimbursements. Make the doctors & hospitals, the farmers and defense contractors, and the currently elderly bear the inconvenient for a few weeks of uncertain payment schedules. And explain to the American people that the circle of people who need to be inconvenienced will necessarily grow week after week until congress gives in. Remind people that the concessions the right is after mean the permanent abolition of Medicare, followed by higher taxes on the middle to finance additional tax cuts for the rich.
Of course this won't happen - because they really don't want to. Obama and the Democrats are owned by the same people that own the Republicans. We on the the progresive side used to say the Clinton was the best Republican president since Eisenhower. Well Obama has accepted the imperial presidency of George W. Bush which as I see it makes him the best Republican president since George H.W. Bush. While Clinton was to the right of Eisenhower Obama is to the right of Bush 41. He is owned by Wall Street and the military industrial complex. The most important paragraph in Elizabeth Gould and Paul Fitzgerald's Crossing Zero is this:
By late 2009 it was clearer than ever that both Congress and the State Department had come to rely on the American military to set the policy agenda. In fact, it appeared that it might even be impossible for Washington to return to a civilian-orchestrated strategy of nation-building anywhere, after thirty years of militarily enforced privatized foreign policy schemes. An entire industry now existed to lobby against any efforts to reverse the trend, change the status quo or even to make private contractors accountable for the taxpayer money they received. A book by Allison Stanger, One Nation Under Contract, outlined the dimensions of a problem where the private sector had become a "shadow government" operating outside the law with billions of federal dollars, but little to no accountability for how or where the money was spent.
It's impossible for congress to reduce military spending because they depend on money from defense contractors get reelected - the best government money can buy. Of course the same thing can be said for the too powerful to fail banks. The plutocrats are in the drivers seat. If the Tea Party figures that out they may prove to be our salvation.