“If a default is imminent, the option of raising the debt limit by executive fiat has to be on the table,” said Greg Valliere, chief political strategist at Potomac Research. “Desperate times require desperate measures.”

Some professional investors echoed his view, which is a reason Wall Street remains hopeful that the economic and financial disaster a government default could usher in will be avoided.

“At the end of the day if there is no action and the United States has a default looming, I think President Obama can issue an executive order authorizing the Treasury secretary to make payments,” said David Kotok, chief investment officer of Cumberland Advisors in Sarasota, Fla., which has just over $2 billion under management. “There’s always been more flexibility in the hands of Treasury than they’ve acknowledged.”

According to some legal theorists, the president could essentially ignore the debt limit imposed by Congress, because the 14th Amendment states that the “validity of the public debt of the United States, authorized by law,” including for debts like pensions and bounties to suppress insurrections, “shall not be questioned.”

Absent Congressional approval for raising the debt limit, the constitutional route or some creative financing plan, the only alternative to default would be to cut spending by as much as a third, financing debt payments and other government obligations out of money coming in from tax receipts and other sources. If continued for more than a few days, that would deliver a shock to the economy that would almost certainly send the nation, and perhaps the global economy, back into a severe recession.

Before that could happen, analysts say, the stock market would inevitably plummet. “Investors will hit the panic button on Oct. 18 if the debt ceiling has not been raised by then,” said Ajay Rajadhyaksha, head of fixed-income research at Barclays. “The market will force Congress’s hand.”

There are precedents for such a denouement. After the House rejected initial legislation authorizing the bank bailout known as the Troubled Asset Relief Program during the financial crisis in late September 2008, the Dow Jones industrial average plunged more than 700 points in one trading session, prompting legislators to reverse course and approve a similar bill within days.