House Speaker Kevin McCarthy says his branch of Congress could vote on a deal to keep the federal government from defaulting on its debt next week. President Joe Biden is also speaking optimistically about the negotiations, saying leaders have no alternative but to come together and figure out a solution.

That said, Treasury Secretary Janet Yellen has continually warned that the government could run out of money to pay its bills by the beginning of June. That “X-date” is now just about a week and a half away.

Ian Bremmer, founder and president of the Eurasia Group risk consultancy, has been thinking about the politics of this protracted standoff over the debt limit and its consequences. He discussed it with “Marketplace Morning Report” host Sabri Ben-Achour. The following is an edited transcript of their conversation.

Sabri Ben-Achour: We have heard warning after warning after warning about how catastrophic default would be, but neither side seems really to be rushing to get this settled. Why do you think that is?

Ian Bremmer: In part, it’s because if the crisis isn’t real, then you can’t get people motivated to do anything about it. We’re at the point where either they’ll be forced to do a short-term extension at the last minute or they’ll be coming up to real market pain and Janet Yellen screaming “You’re getting close to default!” before everybody pulls all-nighters and it looks like a real crisis.

Ben-Achour: You mentioned markets, and markets have not reacted a ton yet. And one might be tempted to imagine that’s because they would think, “Look, no one would be that stupid to push the U.S. into default. They’re going to work it out.” But how real is the possibility that they won’t?

Bremmer: CEOs have been making pilgrimages to Washington, trying to convince the members of Congress that they spent a lot of money on, “You need to do something to whip these guys in shape because this will be a disaster for us.” So that’s stepping up. I mean, anyone that says that Congress can’t possibly be stupid enough to “X” has not spent enough time in Congress, right?

Look, there are Republicans that believe that “prioritization” is something that should be tested. In other words, go past the X-date, but you aren’t going to actually default on sovereign debt. Instead, you’d simply shut down some of the programs that the government needs to pay for, and that will get you more leverage. So the Republicans do understand that raising the pressure is a useful tactic. And, you know, Biden understands that refusing to come to the table is something that wears these guys down. But occasionally, the game of chicken leads to somebody driving their car into a ditch or even a head-on crash. And there, of course, is some nonnegligible-percentage likelihood of that.

Ben-Achour: The other day, we spoke to somebody, we were talking about the position of the U.S. dollar as the sort of prime currency of the world. And she was saying, “Look, the U.S. dollar is going to be dominant for a long time unless the U.S. does something to shoot itself in the foot, like default.” So how would a default affect the international economy and the international financial system?

Bremmer: A full-on sovereign default by the United States, where the debt limit breaks — that I think would lead to a severe recession in the United States, a stock market crash. It would create panic in other countries, and that would make other currencies more stable and more attractive. But there’s nothing out there, not even on the horizon, that is a challenger, an attractive challenger, to the U.S. dollar.

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