This possibility has been mentioned before, but now it's official: Moody's is placing American government bond rating on review.
The credit rating agencies have great power via their ability to set creditworthiness. Right now the American government has the highest possible rating, Aaa. This means that the risk of default is virtually nonexistent, and thus American bonds can be sold at low interest. If the rating goes down because of any kind of default, our public debt becomes far more expensive to maintain, leading to a much greater debt problem than we currently have.
Some Republicans live in a fantasy world where a default isn't a problem, but this latest news out of Moody's very clearly indicates that it is. Failure to raise the debt ceiling leads directly to increased deficits, end of story, no other way around it. Just one more piece of evidence that Republicans are fiscal extremists, not fiscally conservative. We've come a long ways from the days of Cheney's "deficits don't matter."