The Debt Ceiling Zugzwang

• Posted by Robert Sinn
• on July 30th, 2011

In chess there is a German word zugzwang (compulsion to move) which is commonly used when referring to a situation in which any move the player makes will be a losing move. Here is a classic example of a zugzwang position from the Grandmaster game Najdorf-Mecking 1978:

In the position above the side which is on move will be forced to make a move which will shed at least one pawn and as a result lead to a hopelessly lost king and pawn endgame. The word stalemate is much overused in our daily lexicon. A stalemate is a chess position where one side is on move and has no legal moves, this results in a drawn (tie) game. So it seems the current drama in Washington D.C. is very much a zugzwang situation as neither side appears to be willing to move closer to a compromise in an effort to resolve the debt ceiling mess.

Moreover, since most of our elected representatives are lawyers they are very much aware of the negotiating tactic of not being the first one to name a price or make an offer. As time wears on it becomes increasingly likely that next week will be a roller coaster ride in the financial markets.

Hat tip to Joe Weisenthal (@TheStalwart on Twitter) at Business Insider for pulling my brain out of the mainstream media think and reminding me of my chess roots.

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