The US treasury has said that a government default would be unprecedented and potentially catastrophic, and could lead to a financial crisis worse than that seen in 2008.
The United States has never defaulted on its obligations, and the U. S. dollar and Treasury securities are at the center of the international financial system. A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.
The US is now seeing the first government shutdown in 17 years - now in its third day. Both sides still seem unwilling to compromise, although most market watchers suggest that a default is very unlikely.