1. Slashed Government Services
If the U.S. goes into default, or runs up against the deadline, the government will have difficult decisions to make. The law will require the U.S. to continue payments for entitlement programs such as Social Security and Medicaid, while at the same time denying the government the ability to borrow in order to pay for them.
2. High Interest Rates
High Interest Rates
If the markets start to get worried about the possibility of a government default, expect to see sell-offs of U.S. Treasury bonds, which will in turn raise interest rates across the board, according to economists. That could mean higher mortgage rates and borrowing costs for everyone, creating inflation
3. Market panic
Economists fear that as interest rates are skyrocketing and debt holders are unloading their bonds, it could create a market panic similar to the stock market crash of 2008, but possibly worse.
4. A Run on Money Markets
Some analysts are worried that the threat of a default will cause a run on money market accounts. Such a run was a key ingredient to the stock market crash in 2008. If a large fund has to halt redemptions,
5. Gold Sell-off
government could avoid a default by selling government assets, including gold supplies. Geithner said it wasn’t a “viable option,” because it would undercut confidence in the United States, and could possibly reduce the value of those assets held by private citizens.
6.Long-term Effects
Even if Congress eventually resolves the fiscal impasse, a default could lead credit rating agencies to permanently downgrade U.S. debt, and the impasse could have long-standing effects on America’s economic standing in the world
www.bankrate.com/banking/federal-reserve/what-debt-ceiling-means-for-your-wallet/
h/t Goneviral