Reply #4: There's the issue of countries that have bought our Treasury Notes and financed our debt.

[no_hypocrisy]

They have IOU's. Ideally they wait to call them in.

But if this country defaulted, they have no assurance at all that they will get paid back. In other words, billions of dollars that they lost.

So to cut losses (literally and figuratively), they sell their IOU's for less than they're worth. The Treasuries are worth much less than their stated value. And the mass selling lessens their value further. And then the Fed has to raise interest rates that the Treasuries pay in order to make up the difference. And when interest rates are raised on Treasuries, the rates are raised across the board.

You want to buy a house? Yesterday, your mortgage could have been at 5 percent. Today, it's 8. Same thing for commercial loans if you want to maintain a line of credit for your business, start a business, go to college, etc. You can't survive without credit and that credit just got more expensive.

And Wall Street will have some bad days as stocks will cost more due to the higher interest and the effect of more expensive credit for American business.

It's a downward spiral that's hard to reverse once it gets started.