I've read a few places in Australia if your Parliament deadlocks, it is dissolved and that actually happened once?
All we have left is a "discharge petition" trick if 218 signatures can be assembled - it's actually something used in a movie. Which is insane. But that is the US. http://en.wikipedia.org/wiki/Discharge_petition
It's a fairly typical feature of parliamentary systems that, if the Government fails to pass a Matter of Confidence (such as, among other things, a budget), this constitutes the passage of a Motion of No Confidence, and results in the government being dissolved.
This has happened any number of times in the history of Australia, Canada, Germany, Japan, and the UK, among many others. See http://en.wikipedia.org/wiki/List_of_prime_ministers_defeate... for a list
This is a trait that applies to (nearly?) all countries that follow the Westminster system, which is to say Britain and many of its former colonies, including Australia.
The basic concept is that if a vote of non-confidence is passed, then the ruling government must dissolve and elections must be called. The trick here is that all appropriations bills are automatically considered to also be confidence votes.
I'm not sure about Australia, but in Canada it goes one step further: any bill, introduced by the ruling party, that represents their core party agenda, is also automatically a confidence vote. So, for example, if a party wins an election on a platform of banning gay marriage, and the subsequent bill fails to pass, the government is dissolved.
This can have some positive effects - it tends to make party platforms more moderate and the legislation itself less extreme. This only works in multi-party systems though, since in a two-party system the majority will simply never lose a confidence vote.
The economic fallout would be terrible for everyone, but once upon a time that would prevented a shutdown in the first place.
So I suppose, unless we are anarchists (which I'm not) or desire the end of the US (which I don't), then leaving a few things running makes sense.
How would a one day stop compare to a large winter storm's effect on aviation? How would it compare to the days after 9/11, or the early August 1981 air traffic controller strike?
It's difficult to gauge the effect of a one day cessation of air traffic in comparison to, a week (or two?) of the services that are being shut down now, and say it is necessarily worse.
How would it compare to the economic fallout of putting off progress in health care yet another decade or two?
Furthermore, maintaining focus on keeping perspective, even a single day delay in payments on US securities could be the economic equivalent of the apocalypse, and yet that seems to be on the table for the craziest of the crazy legislators.
There's a lot of discussion about what would make the issue more concrete, and people talk tough about how Congress shouldn't be paid. If they really wanted to inspire them to find a quick solution, maybe all general aviation across the country could be shut down. The economic fallout would be much less, but people who get a direct line to congressmen would tell them to get to work.
Basically the Governor General is the Queen's official representative in Australia and officially our head of state. They have the power in specific circumstances to dissolve parliament and force an election. One of those circumstances is if the government fails to legislate a budget. It's complicated how the scenario occurs, but it happened, the powers of the governor general were exercised and a new election was held.
In this case the scenario is only possible because we recognise a power higher than our own parliament, that of the Queen. The USA doesn't have that but perhaps an alternative system could be worked out (if it's even desired, I think it's a useful thing to have).
[1]: http://en.wikipedia.org/wiki/1975_Australian_constitutional_...
https://en.wikipedia.org/wiki/Double_dissolution#History
The event you describe is related: Whitlam requested that the Kerr dissolve parliament, but instead Kerr chose to dismiss Whitlam and instate the opposition as caretaker.