By: Alison Kosik
Washington, DC - The U.S. is three days away from the debt ceiling deadline -- the possibility of default sparking concern of potential economic turmoil around the world.
Here at home, a default could mean a serious hit to your investments like your 401k. Wall Street is now waiting on Washington to dictate the trades as banks are predicting the S&P 500 could see painful losses, as high as 45%, if an agreement isn't reached.
A default also means interest rates for credit cards and students loans would spike as well-- as payments from the government would dry up.
The ripples of a default would be far-reaching. The global marketplace feeling the effects of the weakening dollar.
Most recently, the US teetered dangerously close to the debt ceiling deadline in August 2011, where a deal was struck in the 11th hour.
The US' current debt limit sits just under 16.7 trillion dollars. The exact day when the US government will run out of cash to cover its bills is not certain. Because even when the deadline hits, revenue will still be coming in. Lawmakers have also been negotiating a plan. It includes a temporary fix to increase the debt ceiling.