“From the Treasury markets perspective, we’ve been down this very well-worn path a number of times and everybody knows the debt limit is getting raised, full stop, end of story,” Lyngen said. “If there was a real expectation that the debt ceiling wouldn’t be raised to accommodate continued debt payments, then you wouldn’t have 10-year Treasury yields trading at 3.35. If there were any chance of delayed or defaulted payments, then we would see yields trading much higher than they are.”…

Merk said one positive from the debate over the debt ceiling is that it’s another event that raises public consciousness about the long-term fiscal crisis. On Monday, Standard and Poor’s warned that it may cut the U.S. credit rating in the coming years if no agreement was reached to put the nation on a sustainable fiscal course.

“One thing [the debt ceiling debate] does, it highlights to the American people that there are some serious issues,” he said. “With the S&P warning and the debt ceiling [debate], hopefully the public at large will recognize that we are on an unsustainable path and that there’s nobody rich enough to get taxed to get rid of these issues. We have to tackle entitlement reform, and that’s what this debate is about.”