Don't buy the hype of the default-doomsters in the event of no debt ceiling deal, says John Makin - formerly a principal at Bruce Kovner's Caxton, now with the AEI. Instead, buy long-dated Treasurys - lots of them.
Reaching the debt ceiling means no new government borrowing, but does not mean default as the Treasury brings in plenty to pay its debt service. However, government spending will need to by cut by about 20%, or 5% of GDP - sure to plunge the economy into a nasty recession and a dangerous deflation.
Those screaming instant chaos this month will initially be seen as "crying wolf," but - with a 20% cut in government spending - trouble will hit soon enough. That means everyone loses - except buyers of Treasurys.