Now that i've gotten my rant out of the way (and no, i don't feel better), here is an interesting observation:

Predicting where the market is heading is a daft exercise. But its nonchalance suggests that investors are no more worried about the possibility of a U.S. default now than they were on Friday. The consensus seems to be that the debt-ceiling crisis is an obnoxious piece of political theater that will end as close to the default deadline as possible, and that it is not an actual financial crisis that needs handling now.

Indeed, the current "crisis" is a manufactured one. Of course the United States needs to get its fiscal house in order. Of course the debt has ballooned to threatening levels. But the problem remains long-term and mostly about ensuring job growth and bending down the health care cost curve. Still, it is not clear what the scale of the catastrophe could be should Congress fail to raise the debt ceiling. Some investment banks speculate that the market reaction might not be as bad as people think, with government going into a very short-lived shutdown, voter anger forcing Congress to get its act together, and the market rolling its eyes even if it dumps some bonds.

Not that i think we should legislate based on how the stock market reacts, but this goes along with what Krugman said: better to default and see what happens than cut Medicare, Medicaid, and Social Security.