The one thing to keep in mind about the showdown in Washington over government funding is that it is a manufactured political fight and therefore can yield quickly to a political fix.
That doesn't mean it will, however.
Economists and other specialists don't expect turmoil in the financial markets immediately. But they also say that without a political compromise between the Clinton administration and the Republican-controlled Congress there could be economic problems in the future.
Saranna Thornton on Monday recalled a similar impasse when she was a staff member of the Federal Reserve in 1981.
"It was resolved without this sort of big standoff," she said. "The two sides were more willing to negotiate than to manipulate the debate."
This time it is different, said Thornton, now an assistant professor of economics at Colby College in Waterville, Maine. "They're playing Russian roulette on an issue that is traditionally dealt with at election time using ballots.
. . . The Republicans believe they have a mandate from the last election and the president feels like he has a mandate from his election. For this to be resolved, there has to be a compromise."
As of late Monday, Congress and the White House were not compromising, although the big worry - that the government might default on principal and interest payments - has been snuffed out for now.
"This can be finessed for a year or more," said Robert Reischauer, a former head of the president's council of economic advisers.
But the other problem - money to keep the government operations going - still hangs in the balance.
Without a compromise on government funding 800,000 federal workers will be staying home beginning today. The Smithsonian and national parks will shut down, and doing business with the federal government on passports, visas, new applications for Medicare and Medicaid and other matters will be a hassle because of manpower shortages.
At this point, the fight has little to do with the multitrillion dollar economy in which most Americans work, spend, save, invest and otherwise exist. The stock market Monday took the debt-ceiling situation in stride, with the Dow Jones Industrial average rising 2.53 points to a record 4,872.90. The dollar was generally steady and international credit markets were unfazed.
"Oh, sure, it's a big deal for the people that are sent home" by the federal government, said Douglas Holtz-Eakin, professor of economics at Syracuse University. "But that is a flea on the $7 trillion economy."
"The fundamentals of the economy are very good right now. They will stay good," agreed Brock Blumberg, professor of economics at Wellesley College. "This is a political game."
It is a serious game, however, especially if the government ever really verges on defaulting on its debts - on the savings bonds, Treasury notes and other financial paper it issues. At that point, the government would be in default, and, like a deadbeat borrower, the government's credit rating could suffer and the cost of future borrowing could rise.
"No business, no household would put up with this sort of this thing," said Robert Eisner, an economics professor at Northwestern University in Evanston, Ill. "It was an artificial (debt) ceiling that was put in as a political gesture."
Emergency moves made Monday by Treasury Secretary Robert Rubin should forestall that situation. But the brinkmanship might already have had an effect. Last week, Standard & Poor's, the credit rating agency, warned that "unquestioned faith" in the U.S. ability to pay back its debt is eroding.
"Clearly, the government is less creditworthy and will be paying a premium for that in the future," said Roger Brinner, and economist with the DRI-McGraw Hill.

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