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How the Debt Ceiling Crisis Impacts You

Not every household has felt the impact of the federal government's partial shutdown. But if Washington fails to make a deal on the debt ceiling and the nation defaults on its debt, that may change.
Not every household has felt the impact of the federal government's partial shutdown. But if Washington fails to make a deal on the debt ceiling and the nation defaults on its debt, that may change.

If the difference between the government shutdown and debt ceiling debate is confusing - it's not you, it's congress. Their stalemate has intertwined the two.

The government shut down because congress didn't pass a budget to keep all federal agencies running. It's like a household's money for everyday expenses like groceries, or gas in the car.

The debt ceiling deals with borrowed money, like a household's credit limit, albeit a nearly 17 trillion dollar one. The Treasury Department says on October 17th, the U.S. will max out.

There is no option that prevents us from being in default if we don't have enough cash to pay our bills.

Balancing Washington's checkbook may sound like Washington's problem. But millions of Americans will feel the effects if there's trouble paying the bills.

A default could wreak havoc on the stock market, potentially sinking retirement funds.

Bank loans for homes, autos, and higher education, plus credit card debt, could become more costly, as interest rates rise.

The debt ceiling debate in the summer of 2011 took a toll on consumer confidence despite a last-minute deal. This time it's on the cusp of the crucial holiday spending season.

The National Retail Federation issued a forecast for a modest increase over last year, but with the caveat that economic uncertainty could end up playing Scrooge.



(Karin Caifa for CNN's Consumer Watch)

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