A government shutdown won’t significantly delay hitting the debt ceiling:
Unlike the last government shutdowns, which came in December 1995 and January 1996, the current showdown comes at the start of a new fiscal year. October and November are important months for federal spending, with large mandatory expenditures. [Steve Bell, the senior director of economic policy for the Bipartisan Policy Center] said that regardless of a shutdown, he expects the Treasury’s extraordinary measures, which have allowed the government to manage its debt without raising the debt limit, will become insufficient to meet the government’s obligations between October 18 and November 5.
Ezra hopes that powerful interests, such as Wall Street, will force the GOP to make a deal:
One way a shutdown makes the passage of a debt limit increase easier is that it can persuade outside actors to come off the sidelines and begin pressuring the Republican Party to cut a deal. One problem in the politics of the fiscal fight so far is that business leaders, Wall Street, voters and even many pundits have been assuming that Republicans and Democrats will argue and carp and complain but work all this out before the government closes down or defaults. A shutdown will prove that comforting notion wrong, and those groups will begin exerting real political pressure to force a resolution before a default happens.
Drum asks, “what will it take to end the debt ceiling crisis?”:
Here’s a guess: a stock market crash. If we really and truly breach the debt limit without a resolution, markets will probably go crazy. In fact, they might go especially crazy because they seem so sure that it won’t happen. But that’s the one thing that always seems to get everyone’s attention. You can have failing banks, massive ranks of the unemployed, and auto giants going bankrupt—and Congress will twiddle its thumbs. But let the Dow fall a thousand points or three, and suddenly they spring into action. There are lots of ways this could end, but I wouldn’t be surprised if that turns out to be the winner.
The Dish 