Krugman has this to say about it:
For those not familiar with how financial markets work, US Treasuries are the ultimate safe asset, used as collateral for everything. Even a hint that some Treasuries might not be honored could bring everything to a screeching halt
Musk and Trump are both in the habit of stiffing people they owe money. If markets even suspect that this habit will extend to Treasuries, God help us
Well, you’re in luck. They’re actively scuttling the ship as we speak. Whether you’re going to like the new one remains to be seen. I have a feeling it will be much smaller and is already full.