What happens if the U.S. defaults?
It would be similar to what happens when borrowers miss credit card payments — they find it much harder, and more expensive, to borrow money. Because U.S. debt is held by investors across the world, such a scenario would threaten to destabilize global bond markets.
And if the U.S. can’t pay its bills, the government would pull a huge amount of spending power out of the economy overnight.
By choosing not to pay some combination of Social Security checks, federal workers, bondholders and more, the government would be killing the equivalent of one-tenth of American economic activity.