WHY haven't financial markets been more perturbed by the dangerous game being played in Washington? There are plenty of explanations circulating, but we shouldn't ignore the most straightforward one, however unlikely it seems: because the game isn't that dangerous.

Let's stipulate a few things before proceeding. The political mess in Washington is every bit as stupid (and, for an American, embarrassing) as everyone says it is. It has also already done its share of harm. The government is wasting the opportunity presented by dirt cheap borrowing costs to make valuable public investments and boost short- and long-term growth. If the government were dead set on slashing deficits there are vastly better ways of doing it than what has emerged through several years of disaster chicken. Foolish fiscal battles, and the Republicans' daft and doomed attempt to short-circuit Obamacare, have had an enormous opportunity cost, in terms of the legislation that might have been passed—immigration reform, tax reform, and so on—but which has now been delayed by these antics and potentially sunk by the accumulation of bad blood. And the debt ceiling is a doomsday machine. If Congress actually did fail to authorise the issuance of more debt and the White House didn't come up with a work around then payment prioritisation for any length of time would mean dramatic and chaotic austerity sufficient to return the American economy to recession. And if the world actually did lose faith in American government debt as a safe asset the resulting financial-market chaos would be difficult to predict in its specifics but easy enough to imagine in its generalities. It's a terrible situation.

But how much of this is new information? Surely markets have by now priced in deep Washington dysfunctionality, rapid fiscal consolidation, and even the new norm of debt-ceiling gamesmanship. Default, in the sense of not receiving the expected pay-off on a loan to the government, is always a risk in any country, including America. The question is whether perceptions of this risk have gone up.

The answer is...sort of. Though Treasury yields have not moved very much on the whole in response to the stand-off, yields on very short-term debt—at durations of one and three months—have moved up substantially. The cost of insuring American debt has also jumped over the past month. One has to assume that on some debt vintages expectations of default have risen at least a bit.

But. The yield on the 1-year Treasury is essentially unchanged from where it began the year or where it stood a month or two ago. The dollar has been a rock. Inflation expectations have been stable. Equities remain close to all-time highs. One is forced to conclude either that default would not be a disaster at all, or that the kind of default markets think has grown likelier is nothing at all like the sort of default that would be a disaster.

Felix Salmon, in a post arguing that America has already begun rolling off the cliff (or into the fire or whatever), explains what might be behind all of this:

[I]f you really do expect zombies to start roaming the streets the minute that the US misses a payment on its Treasury obligations, you’re likely to be disappointed. Yes, the stock market would fall. But the price of Treasury bonds would remain in the general vicinity of par, and it might even go up if Treasury announced that past-due interest would be paid on all debt at a statutory rate of 8% per annum. Even when it’s Treasury bonds themselves which are the instruments in default, Treasury bonds remain the world’s flight-to-quality trade, and the expected recovery on all defaulted Treasury obligations would be 100 cents on the dollar — or more. The harm done to the global financial system by a Treasury debt default would not be caused by cash losses to bond investors. If you needed that interest payment, you could always just sell your Treasury bill instead, for an amount extremely close to the total principal and interest due. Rather, the harm done would be a function of the way in which the Treasury market is the risk-free vaseline which greases the entire financial system. If Treasury payments can’t be trusted entirely, then not only do all risk instruments need to be repriced, but so does the most basic counterparty risk of all. The US government, in one form or another, is a counterparty to every single financial player in the world. Its payments have to be certain, or else the whole house of cards risks collapsing — starting with the multi-trillion-dollar interest-rate derivatives market, and moving rapidly from there.

Mr Salmon makes the true and important point that disaster would result when the realisation that Treasury payments couldn't be counted upon changed Treasury's status as a risk-free instrument. The trouble is that a status change has to be the disaster transmission mechanism because actual cash losses associated with "default" probably wouldn't materialise. But if no one thinks that cash losses will ever materialise then why should there be a status change?

Default is supposed to be in a special category of obligation repudiation (as opposed to inflation, say) because it represents a clear red line being crossed. Markets panic over default in a way they don't over a rise in inflation from 1% to 3%. Defaults trigger credit-default swaps. And so on. But there are defaults and there are defaults. How would the Lehman bankruptcy have mattered if investors felt confident that, whatever payment interruptions occurred, Lehman debt would end up returning 100 pence on the pound? And if as a result there had never been a liquidity problem in the market for Lehman debt? What are the consequences of default if an investor never need worry about market liquidity and never need worry about lower-than-promised pay-offs?

And why should markets' confidence that those conditions are unlikely to be upset be shaken? For all the Congressional drama, I'm not sure the probability of a big bang default has ever budged from anything other than miniscule. And if markets' confidence that those conditions are unlikely to be upset is unshaken, then why should any of this debt contretemps much matter?

It will matter in some ways, of course. Financial activities that used Treasuries as if they were honest-to-god risk-free assets might be disrupted. But if the American government were the platonic ideal of functionality its debt wouldn't be honest-to-god risk-free. There's no such thing. Changes at the margin are not nothing. But they may well be far less important in the scheme of things than any number of other rich-world policy choices from the past few years.

And that takes us to a final point. One might say: maybe Treasuries are highly liquid and maybe you never have to worry about losing money lending to the American government, but why put up with this kind of foolishness if you don't have to? Well, where else are you going to go? People say that American debt benefits from being the least dirty shirt as if that meant American debt weren't any great shakes. But being the least dirty shirt is a pretty big deal. The market for American government debt is larger than that for any other sovereign debt—by a long shot. Japan is the only economy that comes anywhere close, and it isn't exactly an investor's dream when it comes to weighing up tail risks. After that there are sound-looking markets and unsound ones, but none are even a sixth of the size of America's. And America pays its debts in a global reserve currency backed by its own, independent central bank. Treasuries are simply special. Not so special that their status couldn't be altered by a significant enough event. But markets do not think that the odds of an event of that nature have risen. Hence the market calm.

This may all read like hubris and complacency. I could be wrong; maybe debt-ceiling chicken is like Russian roulette and each harmless pull of the trigger brings disaster one step closer. I certainly don't wish to defend debt-ceiling hostage taking; it's reckless and stupid and there is always a chance of something going awry. And I certainly don't wish to imply that this all has been costless. If tomorrow Congress passed a clean continuing resolution and abolished the debt ceiling I suspect equities would have a pretty darn good day.

But by focusing on the effects of the worst-possible-thing-that-could-happen without much regard to whether expectations of the WPTTCH actually occurring have changed, we may all have lost some perspective on the dynamic in Washington. Last time, a deal got done long before even a tiny, technical default was a remote possibility. And America then went on to continue to provide lots of nice Treasuries while also stabilising growth in public-debt-to GDP and managing decent (by rich-world standards) output growth and stable inflation. And kept on being innovative and open and dynamic in a way none of the world's other large economies manage. This time? Maybe, a week from now, zombies will roam the streets. But I'd bet my money on a deal getting done long before even a tiny, technical default becomes a remote possibility.