In recent years, growth in elite polarization has broken down a series of bipartisan norms in Washington, but the GOP's brinksmanship over the debt ceiling (which will continue today in a meeting at the White House) is historically unprecedented. It's worth underscoring what the stakes are.
Unlike other commentators, political scientists are often relatively sanguine about polarization. The US had very high levels of polarization in the late 19th and early 20th centuries and survived intact. The depolarized mid-20th century norm that so many in Washington idealize was an artifact of the divide over race, so recent increases in polarization can be seen as a return to historical norms. In addition, high levels of partisanship can be clarifying for voters, who get clearer choices between the parties. The comparative experience also suggests the need for a more nuanced view -- many other rich countries function perfectly well despite highly partisan politics.
The problem, however, is that the US political system is choked with veto points (both constitutional and procedural) that can be targeted by opposition parties. The costs of those tactics can be extremely high. Consider this plot of partisan polarization in the US (as measured by the distance between the House party medians in DW-NOMINATE) against estimates of the US share of world GDP (using data from Angus Maddison):
The post-World War II economic system was built around the US economy at a time when partisan polarization was relatively low, which increased stability and gave elites substantial room to maneuver in economic policy matters. Now, however, growth in polarization has fueled a debt ceiling standoff that threatens to destabilize financial markets at a time when US still makes up a substantial proportion of the world economy and plays a crucial role in bond and currency markets.
Obama and the Republicans may yet cut a deal before the ostensible default deadline of August 2. Even if they do, though, will every future debt ceiling increase be held hostage by the opposition party? As Jonathan Chait and Matthew Yglesias note, this prospect is a major threat to US economic and political stability, and it threatens to spill over to the rest of the world as well. Democrats may denounce the GOP's debt ceiling tactics now, but they will be hard to resist if, say, President Romney passes a big tax cut that drives up the debt.
Update 7/7 12:00 PM: In comments, Rob objects to my claim that "the GOP's brinksmanship over the debt ceiling . . . is historically unprecedented," citing President Obama's 2006 vote against increasing the debt ceiling, which his aides say he now regrets. My argument is that the default threat is greater now than at that time given GOP filibuster threats and the precarious state of the global economy. The same principle applies to the 1995-1996 debt ceiling fight -- the threat to economic stability is far more significant today.
Update 7/7 3:17 PM: More from Matthew Yglesias:
A related point I would emphasize is that not only does the United States play a much larger role in the global economy than it did during the Gilded Age, but the federal government plays a much larger role in the domestic economy. A lapse of appropriations leading to a “government shutdown” had relatively modest implications in 1911 compared to what it means in 2011. Another point about this is that a lot of us who spent much of the past decade noting that rising polarization was simply a return to the pre-New Deal status quo have actually missed the part where polarization has, in fact, rocketed to the highest level on record.