BREACHING THE LIMIT

It's not clear exactly what would happen if the debt limit isn't increased but none of the options involve preserving the "full faith and credit of the United States."

UPDATE: Brad Plumer has more info, including this gem - 

Back in 1979, after Congress dithered on a debt-ceiling increase, the government inadvertently defaulted on about $122 million worth of Treasury bills, due to unexpectedly high demand and an error in word-processing equipment. This was only temporary, and Treasury quickly corrected the error.

Still, the damage was long-lasting. A 1989 study in the Financial Review estimated that the incident raised the nation's borrowing costs by about 0.6 percent, or $12 billion. And the damage lasted for months. That was after a brief, accidental default that was quickly fixed. A breach today would be an intentional action that would speak to serious changes — and new risks — in the American political system.