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Defaulting on the national debt would be far worse than shutting down the federal government

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Ezra Klein COMPARES two looming deadlines facing Congress and finds one more scary than the other:

There are two fiscal crack-ups on offer this fall. One is a government shutdown. That’s bad, but it’s not a catastrophe. The other is breaching the debt ceiling. That’s a complete and utter catastrophe.

The timeline here is cold and unforgiving: Absent action, the government shutdown will happen at the end of this month. The debt ceiling could collapse as soon as Oct. 18.

If the GOP needs to lose a giant showdown in order to empower more realistic voices and move forward, it’s better that showdown happens over a government shutdown then a debt-ceiling breach. A government shutdown is highly visible and dramatic, but it won’t actually destroy the economy. So an “optimistic” case might be that there’s a shutdown for the first few days of October, the GOP gets creamed in public opinion, the hostage-taking strategies of the party’s right flank are discredited, and Washington is at a much better equilibrium by the time the debt ceiling needs to be raised.

And yes, I realize that naming that tornado of lunacy the “optimistic” outcome is enough to make anyone pessimistic about the state of American politics. Good. You should be pessimistic about the state of American politics.

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