A drop in the ratings

It's a foregone conclusion Congress will vote to raise the debt ceiling again; there is no political spine or discipline to do otherwise.  Unlike the average American household, Uncle Sam has the dubious advantage of increasing his credit limit whenever it suits him.

That doesn't mean he (meaning we) won't pay an increasing cost for doing so, however:

As in the case of Enron, the smart money gets gone long before credit downgrades start hitting the headlines... Here’s the thing to watch: Nobody really knows what interest rate the bond market is going to demand to finance U.S. debt in the future. Right now, the Fed is buying most of the bonds Treasury puts up for sale, and simply printing money to do that. This “quantitative easing” is scheduled to end this summer, at which point Washington will find out what it is really going to cost to finance its debt. In FY2010, we spent $164 billion just on interest payments on the debt — up 18 percent from the year before. And that’s at historically low interest rates. If rates should go back up to their 1970s or 1980s levels, we could easily end up spending more on debt service than we spend today on big-ticket items like Medicare or national defense. That’s the hidden landmine on our national balance sheet: We don’t have to be worried only about the trillions of dollars in new debt that Obama proposed to load upon our backs, but also about what that proposal is going to do to the cost of paying interest on the debt we already have. We already know that we cannot afford the new debt that Obama would have us endure, but the real crisis will come when we find out that we cannot afford the debt we already have.

Perhaps we wouldn't have so much debt if the government wasn't spending almost 100 times more per capita now than it did a century ago...