The base-case scenario is, still, that the debt ceiling will be raised, somehow. But already an enormous amount of damage has been done: the US Congress has demonstrated clearly that it can’t be trusted to govern the country in a responsible manner. And the tail-risk implications for markets are huge. Think of the speed with which the Egyptian government collapsed earlier this year, or the incredible downward velocity of News Corporation right now. When you build up large stocks of mistrust and ill will, nothing can happen for a very long time. But when something does happen, it’s much quicker and much worse than anybody could have anticipated. The markets might not be punishing the US government at the moment. But the mistrust and ill will is there, believe me. And when it appears, it will appear with a vengeance.This fiasco, created by Republican intransigence over what is really a routine Congressional non-event (raising the debt ceiling) is going to come back and bite America big time and all the idiots in the Republican Party are going to be saying "No one could have predicted this outcome!"
But as usual, anything a Republican politician says is a lie. They screw stuff up out of ignorance and venality and then blame others for the outcome. It's happening again. Plan on it.