In all the ballyhoo in Washington over whether or not to raise the debt ceiling, much has been said about the political aspects of the decision, and little has been said about the actual financial impacts on everyday Americans.

If Congress fails to raise the debt limit by the August 2 deadline, every American family will feel the financial impact says a former director of the Congressional Budget Office.

"Interest rates will spread throughout the economy," Douglas Holtz-Eakin, who now heads the conservative think tank American Action Forum, told Fox News on Monday. "Every mortgage will be more expensive, every car loan will be more expensive, every time you go to buy something on your credit card or at a major department store, those lines of credit will be more expensive."

President Obama will continue to meet with lawmakers from both sides of the aisle this week in an effort to come to some kind of agreement on the debt ceiling before the deadline, but the talks, so far, have remained largely in a stalemate. Some Republicans have pledged not to vote for a debt ceiling increase without also enacting significant spending cuts, leaving open the possibility that Congress could allow the deadline to pass without raising the debt limit.

Holtz-Eakin says that if Congress does allow the country to default on its debt, it could signal a financial downfall.

"There's the potential for something that looks like 2008 - a financial crisis, with a spike in interest rates, higher monthly payments on everything that you owe, and the inability of households to get credit at all," he said. "We cannot risk another episode like two or three years ago."

While some criticized economists for past dire warnings that haven't always played out, Holtz-Eakin says this time is different.

"This is a very different kind of action," he said. "We cannot run the risk of leaving $1.5 trillion in bills unpaid."

The Senate will consider legislation spearheaded by Senate Minority Leader Mitch McConnell, R-Ky., this week, which would act as sort of a stopgap, allowing the president to raise the debt ceiling while Congress voices disapproval for a lack of spending reductions. The bill, however, would still face a vote in the House, where it faces a tougher road to passage.

"Nobody knows where that is right now - it's currently being manipulated," Sen. Orrin Hatch, R-Utah, said Monday of the McConnell legislation. "I think he has ingenious ideas, but I don't see a plan yet, and I don't know where they will end up in the end."

Holtz-Eakin said that even with temporary legislation to raise the debt ceiling, the larger problem is with spending.

"They have to deal with our real problem, which is that our debt is too big," he said. "Every American family needs to understand they're at risk, and they need to send the message to their elected representatives - they have to deal with this debt."