The United States might be fewer than 2 weeks away from failing on its debt due to current debt ceiling discussions, an unusual situation that government officials have alternately referred to as “unthinkable” and perhaps “catastrophic.”
When the U.S. government defaults, it means that it is unable to meet some of its financial obligations since Congress did not increase the debt ceiling, which would have allowed for further borrowing to pay for previously approved spending. Anyone anticipating money from the government would be affected, whether they were planning a Social Security check, SNAP payment, payment for government bonds, or, in the situation of federal workers, a paycheck.
According to Moody’s Analytics researchers who examined the likelihood of a default, “the majority state budgets would be hit severely when there is a debt limit violation, but the financial impact differs.”