If a compromise is not reached in four days, then the USA will default. However, game theory suggests that this is highly unlikely. It also suggests that the Republicans will be the ones to fold first.
British politicians are unpopular, but they have nothing on their American cousins. A recent poll this week by Public Policy Polling found that Congress is more unpopular than witches, haemorrhoids and the Internal Revenue Service (though not as unpopular as “twerking”). Government shutdowns are not uncommon in the USA. Before this shutdown there had been 17 since the modern budget system was set in place in 1976. The fact that there has not been one since 1996 is the exception, rather than the rule. The outcome, and causes, of the government shutdowns can be explained using game theory: the study of strategic thinking.
A well known observation in game theory is that in a game of chicken the most effective way to make your opponent back down is not to limit their ability to manoeuvre; it is to limit your ability to manoeuvre. In a game of chicken in which you and another person are hurtling towards eachother in cars, the only way to force your opponent to ‘chicken out’ first and swerve out of the way is to rip off your own steering wheel. Whether or not the Republican leadership are aware of this is unknown, but since the late 1990’s they have certainly been following such logic. Grover Norquist’s no tax pledge (the signatories of which include the entire Republican caucus and who promise to never raise taxes) has essentially abolished the Republican Party’s ability to negotiate. Having signed a pledge (which they evidently take more seriously than the Liberal Democrats’) they leave themselves no capability to compromise.
This also relates to the political system in the USA. Of the 435 seats just 35 can be called swing states. This is as a result of gerrymandering due to the fact that state governments decide the boundaries of districts, rather than an independent commission such as in the UK. The result is bizarrely contorted districts that are created with the sole intention to return the ‘right’ candidate, such as the Democrat-controlled Maryland 3rd congressional district. The result is that Congressmen are highly unlikely to lose their seat in Congressional elections. However, they may well lose their seat in the primary election if they break with their party’s base, such as by violating their no-tax pledge. Though primary elections do not cause this shift by themselves, combined with gerrymandered boundaries they have the toxic effect of polarising the debate; something that is highly evident at the moment.
However, in recent months there has been evidence of a power shift that may indicate that the Republicans will not get their way as they did in 2011. In the 2011 debt ceiling crisis the Democrats offered compromise after compromise only for each one to be rejected until, at the last moment, accepting the Republican demands in full. This time however, it has been the opposite way round. In the weeks leading up to the current government shut down, the Republicans continuously tweeked and watered down their list of demands and Obama and the Democratic Party steadfastly refused to compromise. In the last day, the Republican House Speaker proposed a compromise to “move halfway on what he has demanded”. To think that he could have said that three years ago is almost unthinkable.
Only one question remains: who will ‘win’ this confrontation. The correct answer is: nobody. Polling shows that the public have an overwhelmingly negative view of both the Republicans’ and Democrats’ handling of the government shutdown. However, the Republicans are blamed by the public as being responsible for the larger portion of the blame. A recent Gallup poll shows that no party in US polling history has been less popular than the GOP are right now. A recent Gallup voting intention poll, if repeated at the next Congressional elections would put the Republicans at roughly the same position they were after the Watergate scandal. Moreover, there is one crucial difference that will inevitably cause the Republicans will fold before Obama: Obama no longer has to face an election again in his life. Congress however, will face elections in 13 months time. Obama has quite simply got nothing to lose.
The government shutdown has been significantly hyped up by the media. The result has been inevitable ever since it started. It will not last as long as the government shutdown of 1996, which lasted for 21 days. There are enough moderate Republicans, in spite of the system that polarises the two political parties, to pass a clean CR. It is likely that the resolution will come more swiftly than most people are expecting.