What he (Random.Capital) said. US has to "refinance", which means, rollover its debt. You only get to do that if everyone has confidence. Absent that, bye bye.
This is what was being risked during that crazy debt ceiling debacle: loss of confidence. You lose that, and this would even be true for Germany (Germany has been over the eurozone debt limit longer than Italy; true fact) and the game is over.
Done.
Finished.
...and to those who are always carping about how "debt is bad": I don't know of any company that can exist for long without access to a credit line for "working capital". In the real world, invoices are paid net 30 or net 60, and if you get paid in that timeframe for real, it's because it's a longtime customer who knows, trusts, and likes you. Otherwise, you wait. And while you wait, you borrow. Because you have to meet your payroll, because you have vendors who absolutely have to be paid, because the landlord for your office building/mall/storefront ain't gonna wait; because the electric company will cut you off faster than a ho will blow a 5$ trick.
No company can exist without credit. No country can for long either. That's just the way it is.
