What will the possible impact be on your life should the USA default on its debt?

We would have to lend more money to our unemployed relatives to cover the delay or loss of public benefits, and especially our Mother In Law whose only income is Social Security and Military Spouse pension.

My husband has already freed up around a hundred thousand of our retirement funds to be able to buy up bonds when they come back on the market.

I’m actually pretty worried about this. I graduate from college in December and if finding a job is hard now, I can imagine how hard it would be then. I’m hoping this doesn’t turn into another 2008-type of situation where everyone loses their jobs.

Honestly, though, I don’t know much about it. This new plan they were supposed to be negotiating would raise the debt ceiling and we’d be good through February, right? Well, what then?

I think that some of the responders above are confusing the US govt. defaulting on its debts with the government shutdown or reduction of many of its services, which already is into its 16th or 17th day.

Since the OP specifically asks about the government default, here is the impact that I think the default will probably have on me, and on most of us as well. The government will have to pay higher interest rates on its bonds, and interest rates in general will go up. By how much? Depends on how bad the situation becomes and on how long it goes on. If it goes on for a sufficiently long time, then inflation will set in. Higher interest rates and higher inflation will affect us all.

However, I don’t think it’s going to happen. The consequences will be too dire for Congress to allow it to happen. But I could be wrong…

Best case scenario is that the damage will not be too big to the rest of the world when the Great Satan collapses and its inmates start continue killing and start eating each other.
But thanks to intertwined economies, The Colonies will drag the rest of us with them to their wet graves at the bottom of the ocean.

I don’t have much in stocks right now, haven’t for a while, so I would not see a huge loss that way, but a run on the banks would be scary. I am in the process of buying a house to build and if the economy falls apart I will have a contract that hooks me for a lot of money but no house. It would be worse to me than being in my house already and it losing value. I would seriously consider not building and losing what I already put down in deposits, which is still a huge chunk of money. The builder would make out like a bandit. I would hope out of decency he would not put it on my credit.

Anything affecting the economy could greatly affect me. My husband now works for a retail company so his job would be in jeapordy and he is our only source of income now.

I take care of my aunt’s bills. I use her money, but I pay all of them for her. If she stopped receiving social security we would burn through her money fast. She also gets medicaid for an aid who comes daily to cook for her, take her out, help her with daily needs. So, that person would be gone. She gets a small small amount in food stamps, I think it is $100 a month. I still don’t understand why it is so low. She would lose that too eventually I guess. Once she went through her money probably my parents would have to support her. That would happen within months without social security. We could move her to a less expensive place, but moving her would be a nightmare in her condition. In her city she might wind up in a less safe Neighborhood also, and really she would not save that much money.

For me personally, social security is part of my retirement plan. I am not sure what I would do to make up the difference. I guess we would start saving what previously went into social security in our own bank account.

If the government slows down or halts or big programs get dismantled, a lot of people will be out of a job. That will flood the market with people looking for work.

I think a crisis might eventually lead to a silver lining, but the process of getting to the silver would be full of black sludge, poison, and suffering. Our position in the world as powerful would be really damaged financially and even militarily.

Saw this coming so may lose some on 401k, the recession taught a lot of us valuable lessons on debt.

Huge. I work in the securities industry, it will be a complete mess, and a chance we’re down 10% by about 9:40 ET tomorrow.

I should see a substantial amount of profit whether we default or not. I’m hedging all my investments. I investing in positions that the U.S treasury securities will go down and have positions setup that it will go up. If one goes against me, it will automatically get closed out, and i’ll take the ride for the other one.

I did the same for currency – that the US dollar will decrease in value relative to foreign currencies and visa versa.

Likewise for gold and silver.

And last but not least, bankruptcy law firms.

On the upside, if this does become a third world country, I have experience in doing without.

For me personally..I think I’d notice the run on the banks first, and that would be a bit scary. Not being able to access money that is by rights mine..is a frightening thought.

We have some money set aside, and some cash on hand..and a lot of food saved up, so I’m not too horribly worried. (Granted, not as prepared as my Mormon friends are but then maybe now would be a good time to download their guide and start working from it?)

If we have another recession I suppose my job is at stake just like everyone else’s.. and like @Seek_Kolinahr both my husband and I have experienced doing without for extended periods in our past..so we’d make-do and teach our kids some fantastic (albeit not-too-pleasant) lessons about living with less.

I have no debt so I’m lucky there and own my home outright. Our income comes from apartments and if people can’t work they will move in with family and we will have vacancy and delinquency issues.
That’s what I don’t get. Most people in my socio economic class tend to be republicans. Don’t they realize that if they destroy their customer base they will also lose?

[mod says] Please remember: This question is in the General Section. Responses must be helpful and on-topic.

Not much. My taxes keep going up, and somebody else gets the money. So not much.

As someone who does not live in the USA, I would be most effected by the possible downgrading of American credit rating. This would affect the cost of various goods and services because of the declining value of the US dollar which is used to determine the value of other currencies including that of Canada.

Oh man, it could wipe out my whole family. Then again, we’re in the DC area and obviously there are lots of government workers here.

My grandparents are retired and pay for it through investments and social security. My dad and stepmother are federal government workers with two school-aged kids. My aunt and grandmother have a ton of health problems, and they depend on social security and medicare. My sister is in the military and I work retail in DC.

Looks like it is over for now, although I guess “they” could still lower the US credit rating.

@Haleth I don’t think I realized you are in DC, I grew up in Gaithersburg with Auggie.

It looks like Congress decided to address both issues at the same time, i.e., the debt ceiling and the government shutdown. But what they came up with is not a real solution. They just kicked the can down the road. We’ll be facing the same issues again come January.