As the government shutdown begins its second week, a dangerous new deadline is on the horizon.

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Unless Congress raised the debt ceiling by the middle of next week, the United States government won't have enough money to pay all its bills, and it will go into default.

"The situation is certainly faced with unknowns, because we've never faced this situation before. If the default happens, some bill are going to go unpaid, with all the economic ramifications of that. But what will also happen is the image of the US around the world will be tarnished, and interest rates may go up," says Rutgers economist James Hughes.

He says a default would mean a whole host of federal contractors that wouldn't be paid, money may not flow into transportation projects, "and research funding to universities and the like could be put in jeopardy."

"We have a whole range of economic activities that are supported by federal expenditures and all those would be negatively impacted."

Hughes adds such a scenario would also damage the U.S. financial markets, possibly sending them into a panic, "and an economy could falter very easily with a shock of this nature."