Can Republicans read newspapers?, Or, I don't think anybody expected that Tea Partiers could do something catastrophically stupid

Crain's: How a federal default would hit Chicago and Illinois

A downgrade of the federal government's AAA credit rating "would likely lead ratings agencies to downgrade every state," an Illinois Office of Management and Budget spokeswoman said in a statement. "This action would add hundreds of millions of dollars in interest costs to bonds we sell in the future. Money we desperately need in our state to educate our students, ensure public safety and protect our seniors would now be used to pay interest costs..."

If there is some kind of default next week, the market reaction would no doubt be furious: Credit markets might quickly grind to a halt, much as they did after the bankruptcy of Lehman Bros. plunged the world into financial crisis three years ago, at least until Congress and the White House finally come to terms...

Bottom line, the market's behavior indicates that investors just don't believe Washington is stupid enough to let the government default and plunge the economy into full-tilt recession. At worst, they assume that an actual default would spur action without further delay.

The economic damage and political fallout "would be too much for even the Tea partiers to let that go on for too long," said Justin Hoogendoorn, fixed-income strategist in the Chicago office of BMO Capital Markets, a Bank of Montreal unit. "I don't think anybody in the bond market expects that to happen." (Based on what, exactly? - Ed.)
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