Kevin Drum is puzzled by credit rating agencies fearful of default:
Unless I'm missing something big here, defaulting on a bond payment is the last thing the government would do. There are a whole raft of other disastrous things (furloughs, Medicare payments delayed, Social Security checks reduced, etc. etc.) that would have to happen first, and even if they did, the Treasury Department probably has the constitutional right to do whatever it has to do to make debt payments anyway. So what's going on here?
But we did temporarily default in 1979 partially because of a delay in raising the debt ceiling. Bruce Bartlett compares the current potential default to the last one:
In April, J.P. Morgan surveyed its clients that are large buyers of Treasury securities to see what their reaction would be to a temporary default resulting from failure to raise the debt limit. It found that foreign buyers would likely demand a 55-basis point increase in interest rates (0.55 percentage points) and that this increase could be permanent.
That is consistent with the experience in 1979 when the Treasury defaulted for two weeks over a debt limit increase delay and technical problems with its computers. It caused a 60-basis point rise in interest rates that lasted for years, according to academic research.
The Dish 