Ryan also thinks he can fly (Jason Reed/Reuters)



Via Think Progress, check out Paul Ryan's latest position on raising the debt limit:

If a bondholder misses a payment for a day or two or three or four—what is more important is you are putting the government in a materially better position to better pay its bills going forward.

He's not exactly endorsing a default on our fiscal obligations, but he is saying it would be preferable to go into default for a short period of time than to compromise on the GOP's demands for massive spending cuts. His argument is that financial markets care more about U.S. long-term fiscal policies than about whether or not we pay our bills. That's absurd; bond yields are at historical lows, despite our large deficit. If Ryan were right, borrowing would be far more expensive than it is today.

But while the situation couldn't get much better than it is, going into default would be a disaster. Just look at what happened in 1979 when we had a very brief default driven by technical factors:

When the country had a very short-lived default in 1979 -- due to a technical glitch among other things -- bond yields spiked 60 basis points and, according to those who studied the event, remained elevated thereafter.

Keep in mind that default wasn't a result of political stalemate; it was a technical screwup—yet it still had a big impact, and the impact would be bigger this time around. But even if a short-term default weren't a big deal, it's folly to believe that the default would in fact be short-term. Once you enter default, all bets are off—who knows what will happen. And there certainly isn't a any guarantee that you can depend on anything Paul Ryan says. Remember, this is the same guy who once said "you can’t not raise the debt ceiling," adding that "default is the unworkable solution." Now he says default would be preferable to simply raising the debt limit. There's no telling what his position will be seven weeks from now.