Lehman a 'kindergarten show' next to any default

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Stock market traders and investors don't believe the upcoming fight over the debt ceiling will result in a U.S. default, value investor Bill Miller told CNBC.

But if for some reason the federal government didn't pay the interest on the debt, he warned, that "would make Lehman Brothers look like a kindergarten show."

"The real issue is the debt ceiling, not the government shutdown," Miller said in a " Squawk Box " interview. The Treasury has set Oct. 17 as the deadline for the nation's borrowing authority to be increased.

(Read more: Washington hasbecome 'Land of Oz': Citi chief economist )

Miller-portfolio manager of the Legg Mason Opportunity Trust fund-pointed out that the debt ceiling fight in the summer of 2011 resulted in a downgrade of the U.S. by Standard & Poor's. "But that was in conjunction with the European crisis. So we don't have that European crisis now, and there's virtually no chance we'll have any kind of default."

(Read more: S&P to hold fire on US credit downgrade-for now )

The Legg Mason Opportunity Trust fund returned nearly 40 percent in 2012.

-By CNBC's Matthew J. Belvedere . Follow him on Twitter @Matt_SquawkCNBC .

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