Well, the Administration and the Treasury (part of the Administration) are claiming that the effects of a default could last a generation. This brings up a couple interesting points.
First, there is no reason that the United States should default on its debt just because the debt limit is not increased. Revenues are substantially higher than the service payments on the debt, and the Treasury is required to pay those first since they are actual debt, not political promises (although the Administration is playing politics as usual by refusing to prioritize actual money owed versus money promised).
Second, if it that horrendous, why are they refusing to negotiate with the Republicans? The Republican House has passed four bills to keep the whole government open and four bills to restore funding to parts of the federal government. The Democrats in the Senate have refused to consider any of them and President Obama has stated that he will not negotiate, period. The President's office has gone on to compare the Republican House (duly elected by the American people) to terrorists with statements such as "we will not negotiate with people who have a bomb strapped to their chest". Apparently the Democrats believe that they will gain political advantage by refusing to negotiate with the opposition. The Republicans, meanwhile, have negotiated with themselves four times. When does it end? What responsibility do the Democrats have to make a few compromises of their own?
So let's review what the Republicans are asking for. A one year delay in the implementation of an unpopular law that was passed without one single Republican vote and using unprecedented procedural maneuvers in the Senate to keep Scott Brown (R- Mass) from getting to vote on the bill. Meanwhile, President Obama, with no authority whatsoever, has delayed several major aspects of the bill just by saying so, and has issued waivers from other provisions to major campaign contributors. Is it unreasonable that he should cooperate with Republicans to make his unconstitutional and illegal delays the actual law of the land, and that individuals should get the same one year reprieve that he unilaterally gave to businesses?
I don't think so. I think it is time for the Democrats to come to the table in good faith and cooperate just a little bit, especially to prevent an economic shutdown that would "last a generation".