US in danger of debt-ceiling crisis in October
The US is at risk of defaulting on its obligation to pay its bills this October, revealing that a debt-ceiling crisis is a genuine danger, according to an op-ed piece by Edward D. Kleinbard in the New York Times. A default would cost the US Treasury tens of billions every year in higher interest charges for years to come and could ignite a severe recession. 
Sometime in October, the United States is likely to default on its obligation to pay its bills as they come due, having failed to raise the federal debt ceiling. This will cost the Treasury tens of billions of dollars every year for decades to come in higher interest charges and probably trigger a severe recession.

The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political. It’s something America has avoided in the past. This time, though, will be different.

This country has hit the debt ceiling once, in 1979, and then largely by accident and only to a minor extent. But even that foot fault was estimated to cost the United States about 0.6 percent in higher interest costs for an indefinite period. More recently, congressional debt ceiling brinkmanship in 2011 led Standard & Poor’s to downgrade the credit rating of the United States.

An increase in Treasury interest rates of just 0.2 percent a year would cost the government about $400 billion over the next 10 years. It also would lead to higher borrowing costs for American businesses, because borrowing rates are set by reference to Treasury rates. Moreover, each month holders of tens of billions of dollars in valid claims against the United States would go unpaid, triggering a major recession.