As I watch the federal deficit grow, I'm reminded of a college buddy who once got a cash advance from his credit card so that he could pay his—drum roll, please—credit-card bill.

My friend's one-time, counter-intuitive move was funny at the time and became funnier as we got older, more responsible, and more acutely aware of the significance of good credit—or more importantly, the consequences of bad credit. His decision had no effect on his future, but one can imagine what his credit report would have looked like had borrowing money to pay bills become a habit. After all, paying your bills isn't good enough. You have to do it while keeping your spending in check.

Scale of debt aside, this dynamic is comparable to what the U.S. government is looking at now. Uncle Sam is paying his bills, but the major bond rating agency Standard & Poor's doesn't like how he's doing it. S&P has said it might downgrade the U.S. government's credit rating in two years, if the feds don't get their deficit spending under control.

I called city of Spokane's Chief Financial Officer Gavin Cooley to talk about this issue, and he confirmed what I already suspected. In general terms, a lower credit rating affects a government in the same ways it affects an individual or business. Best-case scenario, it makes borrowing money more expensive. Worst case, it makes borrowing impossible.

Spokane knows something about the effects of a downgraded credit rating. In the early 2000s, the city's bond rating plunged in light of the River Park Square garage bond failure, in which garage revenue didn't meet projections, and the city declined to pay the shortfall. The city gradually has worked its way back to a strong bond rating; in early 2010, S&P upgraded its bond rating for the city to AA, which connotes a "very strong capacity to meet financial commitments."

All is well now in terms of the city's borrowing position, and it's a good thing, according to Cooley. When the city had a bad bond rating in the 2000s, he says, it was in better economic times when more options were available. The city could pay extra to an entity that had a good rating, wrap that around its own bond issue, and sell its bonds successfully. It cost more—Cooley says it's hard to estimate how much more—but the city could still borrow money to accomplish what it needed to do.

Now, Cooley says, it's not as easy for a city with a bad credit rating to partner with a company with a good credit rating and get what it needs. He says he's not aware of any companies that are offering such a service now, and investors aren't receptive to investing in higher risk bonds. It's possible the city wouldn't be able to sell bonds in the current environment if its credit rating fell.

This is one reason, he says, the city remains mindful of how its decisions might affect its credit rating.

The city isn't the U.S. government, and one has a hard time imagining an environment in which our country has a hard time selling its bonds. But it isn't such a leap to imagine the government having to pay a higher interest rate to borrow money, and that means all of us would pay more.

Political talk about the federal deficit traditionally has been just white noise to me. Each political party seems to be critical of deficit spending only when the other one is in the White House, and neither party can claim accurately to be fiscally responsible.

But this report from Standard & Poor's is a shot across the bow, one we can't afford to ignore. If we do, we all could be paying for it in the most literal way.