If the United States were to default on its debt, it would be an unprecedented event with potentially severe consequences. Here’s a general outline of what might happen, although it’s important to note that this is largely speculative given that such an event has never occurred:

Immediate Financial Market Turmoil: The U.S. Treasury bond is considered the safest investment in the world because it is backed by the full faith and credit of the U.S. government. If the U.S. were to default, it would shake investor confidence not only in U.S. government bonds but also in financial markets more broadly. This could lead to a sharp sell-off in stocks and bonds, causing the value of retirement and investment accounts to plummet.

Rising Interest Rates: If investors lose faith in U.S. government bonds, they would demand higher interest rates to compensate for the increased risk. This would raise borrowing costs for the U.S. government, but also for consumers and businesses. Mortgages, car loans, student loans, and credit card rates could all become more expensive, making it harder for people to finance big purchases or manage their debt.

Economic Recession: The combination of financial market turmoil and rising interest rates could push the U.S. economy into a recession. Businesses might cut back on investment and hiring, leading to job losses. Consumers might also cut back on spending, which would further hurt businesses.

Global Economic Impact: Given the central role of the U.S. dollar and U.S. Treasury bonds in the global financial system, a U.S. default could have severe repercussions worldwide. It could trigger a global financial crisis and economic recession.

Government Shutdown: If the U.S. government can’t borrow money, it might not be able to pay all of its bills. This could lead to a partial or full government shutdown, with federal employees furloughed and government services curtailed.

For the everyday person, these effects could translate into a higher cost of living, job losses, a decrease in the value of savings and investments, and potential disruptions in government services. It’s a scenario that policymakers strive to avoid.