Yes, a default is very serious. Using our credit card analogy from earlier, that would mean the creditworthiness of the world’s largest economy would be called into question.
Not only would the borrowing costs for the US government skyrocket, but all borrowing costs for US businesses and households would also jump. Researchers estimate that the national debt would increase by $850 billion in debt servicing costs and an average mortgage loan would cost an additional $130,000.