Stock market traders and investors don't believe the upcoming fight over the debt ceiling will result in a U.S. default, value investor Bill Miller told CNBC.
But if for some reason the federal government didn't pay the interest on the debt, he warned, that "would make Lehman Brothers look like a kindergarten show."
"The real issue is the debt ceiling, not the government shutdown," Miller said in a " Squawk Box " interview. The Treasury has set Oct. 17 as the deadline for the nation's borrowing authority to be increased.
(Read more: Washington hasbecome 'Land of Oz': Citi chief economist )
Miller-portfolio manager of the Legg Mason Opportunity Trust fund-pointed out that the debt ceiling fight in the summer of 2011 resulted in a downgrade of the U.S. by Standard & Poor's. "But that was in conjunction with the European crisis. So we don't have that European crisis now, and there's virtually no chance we'll have any kind of default."
(Read more: S&P to hold fire on US credit downgrade-for now )
The Legg Mason Opportunity Trust fund returned nearly 40 percent in 2012.