When Lehman Brothers collapsed five years ago, it sparked a chain reaction across the world's financial markets. A US default, as unlikely as it still is, could make the financial crisis that Lehman sparked seem like a mere hiccup.
In 2008, most of the world's economies were plunged into recession. Banks and other financial institutions stopped lending to each other. Sharemarkets plummeted, wiping out billions of dollars of investors' savings.
The US and Australian sharemarkets shed almost half their value in the next few months. The Australian dollar lost almost 30 per cent of its value against the US dollar in one month. The US Federal Reserve and other central banks had to step in and inject $US2500 billion into the financial system to get it going again.
Analysts said a US government default on its debt obligations would be an unprecedented crisis of a different magnitude.
"Lehman was an isolated company, and now we are talking about the US government," former US Treasury official and BNP Paribas managing director Tim Bitsberger said.
"If we miss an interest payment, that would blow Lehman out of the water."
The difference in the scale of the debt is a clear indicator. While Lehman owed $US517 billion when it declared bankruptcy, the US has $US12 trillion in outstanding government debt, excluding holdings by the Federal Reserve.
"The whole global monetary system is based on the liquidity of US bonds and the risk-free nature of US bonds. If that changes, we'll have problems in the whole monetary system," said Philip Bayley, of ADCM Services, a credit market consultancy.
The cost of borrowing in the short term has risen sharply as investors become more reluctant to hold Treasury bills during the crisis. Yields on one-month Treasury bills have jumped from 0.0175 per cent to 0.2475 per cent in recent weeks.
In the global financial system, sovereign bonds, which are issued by governments to fund spending, are seen as low-risk assets, especially those of developed countries such as Australia.
US government bonds - known as Treasury bills, notes and bonds according to the number of years they take to mature - are seen as the safest assets to hold.
A US government debt default would introduce risk into the holding of such bonds. That would make lending more difficult and the cost of borrowing more expensive. Some banks could even struggle to borrow at all with the increased risk.
"If they cannot borrow at all, then we are looking at the situation that was worse than the global financial crisis," Mr Bayley said, adding that this time, the US government might not have the cash to bail out banks and other financial institutions as it had in 2008.
It is that fear of plunging the global financial system into uncharted territory, just several years after two large shocks to the credit markets through the Lehman collapse and the eurozone crisis, that has sparked dire warnings from central bankers and financial leaders.
Most recently, International Monetary Fund head Christine Lagarde said the level of uncertainty that would result from a US default would throw the world into another financial crisis.