So what happened during the debt ceiling shutdown during the Clinton administration?: Interest rates
And that's the fact. If we don't raise the debt ceiling and we see a crisis of confidence in the markets, and suddenly interest rates are going up significantly, and everybody is paying higher interest rates on their car loans, on their mortgages, on their credit cards, and that's sucking up a whole bunch of additional money out of the pockets of the American people, I promise you they won’t like that. . . .
Or this statement by Obama on June 29, 2011:
But if capital markets suddenly decide, you know what, the U.S. government doesn’t pay its bills, so we’re going to start pulling our money out, and the U.S. Treasury has to start to raise interest rates in order to attract more money to pay off our bills, that means higher interest rates for businesses; that means higher interest rates for consumers. So all the headwinds that we’re already experiencing in terms of the recovery will get worse.
That’s not my opinion. I think that’s a consensus opinion. And that means that job growth will be further stymied, it will be further hampered, as a consequence of that decision. So that’s point number one. . . .
So what happened to interest rates on Federal Treasury Bonds during the debt ceiling shutdown during the Clinton administration? Note that this concern was also raised during 1995. The data are available here.
If you are interested in seeing the impact on GDP growth and unemployment see here or stock prices see here.
A nice discussion on various past government shutdowns is provided by this Congressional Research Service Report. Among the impacts of the 1995-96 shutdowns were these:
"resulted in the furlough of an estimated 800,000 federal employees"
"Another 475,000 federal employees, rated "essential," continued to work in a non-pay status."
"Federal Contractors. Of $18 billion in Washington area contracts, $3.7 billion (over 20%) were managed by agencies affected by the funding lapse"
"employees of federal contractors were furloughed without pay"
The shutdown impacted: health, law enforcement/Public safety, parks/museums/monuments, visas/passports, American Indians, American Veterans.
Among the impacts for American Indians: "general assistance payments for basic needs to 53,000 BIA benefit recipients were delayed; and estimated 25,000 American Indians did not receive timely payment of oil and gas royalties."