It’s happened repeatedly in the past. 5 times under the previous administration. Unless the government violates the “make whole” provision if the law investments in the G fund are completely safe. You lose nothing. One can always move their money to F or one of the other funds if they take issue with the Treasury’s use of G funds.
https://www.fedsmith.com/2017/08/16/...-debt-ceiling/
The TSP has weighed in at times in the past and notes that there is a “make-whole” provision, meaning TSP participants invested in the G Fund will not lose anything. The TSP issued a statement covering this in detail in 2011, for example. This is a relevant portion of the statement they issued at that time:
The make-whole provision means that TSP participants who have invested in the G Fund will not lose anything. The G Fund account balances would be exactly the same from day to day as if they were invested in Treasury securities. Furthermore, disbursements of TSP loans and withdrawals would not be delayed, nor would the amounts of those payments be reduced.
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