The real bite from the debt ceiling would come if it forces interest rates up. Interest rates have been kept artificially low by the Federal Reserve on purpose. Almost nobody talks about this, and if they do its in a negative light, but rising interest rates would actually have several POSITIVE effects:
1. Rising income for savers. People who actually save their income have been getting the short end of the stick due to low rates on their CDs.
2. Higher Government borrowing costs. This would serve to bring the spending problem to a head and is the #1 thing that can force entitlement reform. Artificially low interest rates are enable Government spending, period.
Right now we live in a dysfunctional environment where the more Government borrows, the lower interest rates get. That’s really the opposite of what SHOULD happen and is an indicator of how distorted our Economy really is.
Saving money is what builds a real stable economy. This economy has been built on spending and negative saving. That string is hitting the wall even now, thus the crisis after crisis.