by Calculated Risk on 9/23/2013 09:31:00 PM

Annie Lowery writes at the NY Times: Shutdown vs. Default: The Relative Impact

At the moment, Congress is figuring out how to avoid two forms of chaos of its own making: a government shutdown and a public default.

The former might happen when the continuing resolution financing the federal government expires on Sept. 30. The latter might happen when the Treasury runs out of room under its statutory debt ceiling. That day — often called the X-date — is likely to come around Oct. 15.

Lowery discussed the costs of both. Basically a shutdown will be inconvenient (for econbloggers because of the lack of data) and will probably cost a few billion dollars (dumb, but manageable). But failing to pay the bills could be very expensive:

There is no real comparison between the cost of a shutdown and the cost of a breach in the debt ceiling.

The two shutdowns of the Clinton years — a six-day shutdown in 1995 and a 21-day shutdown between 1995 and 1996 — cost about $1.4 billion. A more complete accounting suggests that is on the low side.
...
In contrast, a breach of the debt ceiling ... might cost hundreds of billions, perhaps more.

Tuesday:
• 9:00 AM ET, the S&P/Case-Shiller House Price Index for July. Although this is the July report, it is really a 3 month average for closings in May, June and July. The consensus is for a 12.4% year-over-year increase in the Composite 20 index (NSA).

• Also at 9:00 AM, the FHFA House Price Index for July 2013. The consensus is for a 0.7% increase.

• 10:00 AM, the Conference Board's consumer confidence index for September. The consensus is for the index to decrease to 80.0 from 81.5.

• Also at 10:00 AM, the Richmond Fed Survey of Manufacturing Activity for September. The consensus is for a reading of 10.5 for this survey, down from 14 in August (Above zero is expansion).