The US Treasury released a report on October 3 addressing the debt ceiling and the potential effects of an unprecedented default. The report warns that "credit markets could freeze, the value of the dollar could plummet and US interest rates could skyrocket, potentially resulting in a financial crisis and recession that could echo the events of 2008 or worse”.
Costs resulting from the debt-ceiling debate might already be harming the US economy and affecting the financial markets.
We have seen this before: in 2011, the raising of the debt limit was blocked by much debate. This resulted in the first downgrade in the US's credit rating, a substantial stock-market decline and an increase in the costs of borrowing.
The 2011 debt-ceiling crisis resulted in the Budget Control Act of 2011 which created the fiscal cliff where the US Congress and White House raised the debt limit to $16.7 trillion. This new debt ceiling was already reached in May 2013 but by using "extraordinary measures" the Treasury has been able to continue borrowing while staying below the limit. However, this is expected to be exhausted no later than October 17, according to Treasury secretary Jack Lew.
Here's a bit of background on the debt ceiling and commentary on some of the costs already incurred: