Such a default would have significant consequences for the US economy. Here are just some of the things that can happen:
- Increase interest rates across the boar for loans, causing mortgages, car loans and credit card interest rates to increase.
- Small business owners will have a more difficult time getting a loan, as credit will tighten.
- Military men and women will get limited, or no pay.
- Government contracts may be laid off.
- Student loans will be harder to obtain (and have higher interest rates).
- Social Security and Medicare/Medicaid payments may be delayed or stopped.
- Government employees may be furloughed.