S&P didn't downgrade U.S. debt, it merely stated that such a downgrade is a real possibility within the next couple of years. Judging by the way the market tanked on the S&P announcement it is obvious that you weren't the only one surprised. Me, I'm surprised that anybody was surprised. So many people think the United States can just borrow $2 trillion a year forever with no bad consequences. Weird.
Of course there is not likely to be an actual refusal to pay principal or interest. Instead the default will be through the back door, by paying back the loans in dollars worth much less than when the bonds were bought.
