An even more sluggish economy with fewer jobs; higher interest rates for consumers; declining values for retirement plans and eroding credit ratings for municipalities highly dependant on federal largesse. Those are some of the warnings of what a "default" could do.
The August 2 date is a little arbitrary as some say the crunch day is perhaps as late as the tenth, but the issues are the same. "Default" may not be exactly the right word, as the government still has revenue, but just not enough to cover everything. Debt service and entitlements could be funded but sooner or later large aspects of the federal system would grind to a halt and the ripple effects are likely hard to guage, other than the fact its politically unacceptable.
So everybody (almost) is in favor of more borrowing, as its the path of least resistance, as in kicking the can as opposed to bending over to pick it up.
U.S. default could deliver swift hit to consumers - The Washington Post