Why America's credit rating might be cut, and why it matters

We are on the verge of financial catastrophe:

Two major credit-rating firms have warned that the U.S. is at risk of losing its AAA rating. Analysts at Moody's and Standard & Poor said the U.S. credit rating — currently at the highest possible level — could be downgraded if the country continues on its present course. The U.S. national debt is around $14 trillion and rising, and the government must pay over $200 billion a year just to service it. The credit agencies worry that the U.S. is not doing enough to shrink its debt levels. The consequences of a downgrade could devastate the U.S. economy. Is this really a possibility, and should we be worried?