James Saft is a Reuters columnist. The opinions expressed are his own.

A U.S. default or debt downgrade may set off market fireworks but the longer-term effects of the death of Treasury bonds as a universal benchmark of risk may ultimately be more significant.

The U.S. appears to be slouching towards a self-inflicted debt crisis, with Democrats and Republicans unable to agree a plan to lift the $14.3 trillion debt ceiling by the Aug. 2 deadline.

Even if such a deal is agreed, it may not be radical enough to satisfy ratings agencies, notably S&P, which has said it wants to see a $4 trillion reduction over 10 years. A deal on that scale seems unlikely by the deadline, meaning we may be looking at another round of negotiations in 2012, an election year.

All of this may be enough to push S&P or one of its peers into an exemplary downgrade even if there is no technical default, stripping the U.S.’s AAA status and risking an unpredictable chain reaction in global markets.

Even if none of this happens in the next few weeks, the larger truth is that the illusion that the U.S. is a solid-gold credit which can never default is lifting.