As the clock ticks towards our country's debt deadline, the grip of anxiety, has got it's nasty claws into the average american's mindset.  August 2nd, one week away, makes many wonder, if this scenario will play out until next Tuesday.  The truth of the matter is, debt default is serious business.  While many among us, would rather not think about government, politics or repercussions of a default, the fact of the matter is, a default will affect us all.  

Economists believe, the U.S. defaulting on its loans, would send interest rates sky rocketing, and drive the stock markets down around the globe.  At a delicate time, when recovering revolves so heavily on home loans and banks abilities to administer loans, this would inevitably put a stop to all loans.  

The United States will lose its AAA debt rating if a default occurs.  When a country has a perfect record like AAA, an investor knows positively, that they will receive their payment on their loaned money.  A default, will inevitably put the United States at a vulnerable position, where investors don't want to carry the outstanding loan of our country's bad baggage, due to not knowing if they will get a return on their investment.  This will increase the borrowing cost, which will further increase the debt.  The U.S. treasury securities, are the most widely owned in the world, included in the securities are pension funds, insurance companies and banks.  If the treasuries default, markets across the globe could stop and no longer have the cash or assets to pay out.  Oh yeah, and the face value of our dollar, will take another tank across the globe, which could be the birth of hyper- inflation.  Back in the late 90s, in my own college economics classes, all was blue skies and unicorns, so I had no real reason to spend too many late nights burning the midnight oil for "hyper-inflation".  Now, I wish I would of spent more time in the dusty dark corners of the Non-Fiction aisles in the library, cause this is a big one!  

Hyper-inflation=monetary inflation occurring at a very high rate.

High increase in prices at a rate of 50 % or more a month, on goods and services.

I am no expert, but with stagnant wages, this could be the unneeded push our country doesn't need, over a cliff.  Struggling families could be faced with higher prices for food, gasoline, basic utility services etc., and at a huge rate increase.

Besides the above mentioned, if a default occurs, our government would be faced to make immediate cuts to pay the bills.  If we default and choose to pay creditors first, cuts will have to be made to make the payments.  These cuts could include FBI, Medicare, Social Security, Military pay, USDA Food Inspection etc.  These cuts would lead to mass layoffs, further increasing our high unemployment.  Sadly those living solely by means of Social Security, could find themselves without.

Regardless of which side you are on, one has to realize the devastating effects of defaulting on our loan obligations.  In our personal lives, we know that not making our loan payments, could affect our credit worthiness and ability to pay our bills, for months to come.  The United States has way more to lose, than having a late payment fee applied, for missing their credit card payment.  It's time for the kids to stop playing chicken, and get back in the school house.  Class has begun!

Remember, the best you can do is…..get up, stand up, but please…do something!