Our stupid self-inflicted crisis

New York (CNN) -- Let me get this straight. The people who have been preaching the most about the dangers of American decline are right now helping to hasten American decline.

Because if America defaults on its debt, not only will we find ourselves in a far deeper fiscal hole, but the full faith and credit of the United States will be compromised. In our globalized era, that means America will be considered an unpredictable partner and a second-class power.

Worst of all, this will be a self-inflicted wound. It is a direct result of the hyper-partisanship that has been hijacking America's political debates. Now it is compromising our ability to govern ourselves effectively.

The markets are viewing Washington's debt dysfunction as badly as Standard & Poor's and Moody's, which have raised the possibility of downgrading their ratings of U.S. bonds.

The British government's business secretary, Vince Cable, summed up the situation as he saw it on the BBC this weekend: "The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress."

Alternately, The Onion offered this headline: "Congress Continues to Debate Whether or Not Nation Should be Economically Ruined."

Clinton optimistic about U.S. debt talks If you can't quite tell the serious statement from the satire, you get a sense of our predicament. To be fair, there are ideological extremes in both parties who oppose any grand bargain to reduce the deficit and the debt -- some 90 conservatives in the House who oppose any revenue increases and some 70 liberals who oppose any entitlement reform. Both parties had bases that were threatening to balk at a big deal, knowing that default is the functional alternative.

But the blame for this stage of failure lies squarely on the party that unilaterally withdrew from the talks -- and that's the Republicans. House Speaker John Boehner has been struggling to put together a grand bargain with President Barack Obama, running the risk of alienating the tea party base in Congress. He apparently capitulated to their demands Friday afternoon.

And while there is a chance that this is all just another act of Kabuki theater, it seems clear to me that Obama has led on this issue by being willing to risk the wrath of his political base in opening the door to significant entitlement reform. A gesture of potential political sacrifice such as that deserves to be met at least halfway.

But of course the plan being discussed has never been 50% cuts and 50% revenue increases to deal with the deficit and the debt. Instead the ratio has been more like 3-to-1 of cuts to revenues -- something that any reasonable person would consider a win for those who want to prioritize spending cuts on the road to reducing the deficit and the debt.

It seems that actually dealing with the long-term deficit and the debt is not nearly as appealing as demagoguing it.

But it seems that actually dealing with the long-term deficit and the debt is not nearly as appealing as demagoguing it. We are learning that activists and ideologues pushing anti-tax pledges have nothing to do with the responsibility of governing.

If I sound angry, it's because I am -- and you should be, too. America is now in serious risk of defaulting on our debt because we cannot reason together. Reasoning together requires that everybody be willing to give a bit on their ideal position.

When the bipartisan "Gang of Six" proposal was put forward, it was rejected by some Republicans out of hand despite deep tax cuts and historic entitlement reforms and enforceable spending cuts simply because it was embraced by Obama. Think about that. They reflexively rejected a sensible plan simply because it was backed by the president. This reflects a basic and troubling discomfort with bipartisanship, the democratic process and the reality of divided government.

Independents voted for Republicans in the 2010 midterm elections because they wanted checks and balances; they wanted to reduce deficit and debt spending. But they did not vote for dysfunctional government, and they certainly did not vote for default. The polls showing that independent voters say they will blame Republicans more than Democrats for a U.S. default reflects this disconnect.

As we head into the final week of negotiations before the August 2 deadline, let's not forget a few things. The debt-ceiling vote is usually a routine action. It was raised 17 times during the Reagan administration and was never an issue.

After the 2010 midterm elections, this was identified as a crucial vote because of the leverage that Congress has and the likelihood that some of the tea party conservatives would not vote to raise it. So putting the potential responsibility for a default solely on the president is completely disingenuous.

There is talk of the Obama administration "moving the goal posts" in terms of asking for more revenue increases in the latest negotiations. But moving the goal posts on what constitutes a tax increase is in many ways at the heart of the current disagreement. Arguments for raising the top rate have been dropped until after the 2012 election. The common ground compromise available is tax reform.

Closing loopholes and ending tax expenditures that amount to earmarks embedded in the tax code should be a no-brainer. (For a great look at these boondoggles, take a look at this Ezra Klein column from last week.)

After all, it would allow us to raise revenues but keep the current tax levels -- possibly even lowering some rates to stimulate growth. But some anti-tax absolutists have decided that closing any tax loophole amounts to a tax hike unless it is deficit neutral -- ignoring the whole reason for engaging in this forced fire drill.

Even the Republican leader of the Gang of Six, Sen. Saxby Chambliss, R-Georgia, has been forced to defend his bipartisan plan against conservative attacks that misrepresent the Congressional Budget Office-scored $1.5 trillion tax cut as a net tax increase because it would close loopholes.

"Talk radio has come out and just blasted us, and for the most part, they are using trumped-up numbers that are not accurate," Chambliss said to The Atlanta Journal-Constitution. "Their audiences listen to talk radio because they do believe what they say. That's a problem."

The GOP is starting to see the dangers of hyper-partisan media firsthand. The time-honored aphorism by Daniel Patrick Moynihan -- "everyone is entitled to their own opinion but not their own facts" -- is being undercut by critics who come armed with their own facts, making reasoning together all but impossible.

Late Sunday night, the game of chicken had shifted to whether a short-term extension of the debt ceiling -- which Obama had previously ruled out in an attempt to get the parties to focus on a long-term plan -- would be passed. Default is the alternative.

It wasn't long before journalists pointed out a quote from Republican House Majority Leader Eric Cantor in which he was arguing what is now the administration's point just a month ago: "I don't see how multiple votes on a debt ceiling increase can help get us to where we want to go, we want big reforms. ... I am not so sure that if we can't make the tough decisions now, why we would be making those tough decisions later." This is just more evidence of situational ethics in Washington, with hackish hyper-partisanship posing as principle.

The bottom line is that the two political parties are deeply polarized. The American people are not. We have every right to be frustrated with the way they are playing politics with our future.

The opinions expressed in this commentary are solely those of John Avlon.