Government Shutdown Might Be the Least Bad Option
The one small bright side as we slowly walk towards a government shutdown is that this might be the least bad option.
Government shutdowns are damaging, inconvenient and stupid but they are also manageable. We’ve had over a dozen in the last century. As a country we know how to handle them.
On the other hand, a default by failing to raise the debt limit is unknown territory. The implications could be very bad. Even getting close to the deadline last time caused a credit downgrading, an increase in borrowing costs, and a noticeable hit to the market.
Preferably neither would happen but that does not look like a realistic possibility given the politics. It now appears Speaker John Boehner is too weak/afraid of conservatives to control or defy his caucus. If Speaker John Boehner is going to give in to conservatives, it is better he is doing it over a government shutdown instead of the debt limit. If conservatives need proof that these hostage taking tactics can’t work by actually getting a chance to use them, the government shutdown is a much better option. A government shutdown can be quickly fixed once it is over. Trying to put the genie back in the bottle regarding debt limit could be far more difficult.