On a global scale, the U.S. dollar could be tarnished beyond repair. The currency remains the gold standard in world finance, but a missed payment by the U.S. government could change all that. The Chinese, for instance, could start dumping their dollars. Treasury bills have long been viewed as the world's safest investment, but a default could see gold take that title.
Banks, of course, would also react. Business loans could dry up, a development that would result in significant job losses. Take the existing lending environment, where banks are already reluctant to borrow and jobs are already hard to find. Any default by Uncle Sam would almost certainly make matters dramatically worse.
At a news conference at the White House Monday, President Obama urged lawmakers to come to an agreement to raise the debt limit and prevent any of the aforementioned developments from taking place.
"My hope is that as a consequence of negotiations that take place today, tomorrow, the next day and through next weekend, if necessary, that we're going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stabilizes the economy and proves to the American people that we can actually get things done in this country and in this town," he said.
"Let's step up," he urged. "Let's do it."
But with Washington at a standstill because of partisan gridlock, it might be a tall order for lawmakers to do anything. And if they fail, it is clear, the consequences could be felt far and wide for a long time to come.
ABC News' Dan Arnall contributed to this report.