Contact Us

How the Debt Ceiling Fight Might Affect You

Getty Images/Mark Wilson

First it was the government shutdown. Now it’s a fight over whether or not to raise the debt ceiling. Our “lawmakers” are having it out again and, in the end, the losers could be us, the American public. What is the debt ceiling and how could not raising it–or defaulting–affect you?

Here is a simple definition of what the debt ceiling is.

It’s a cap set by Congress on how much the government can borrow in order to pay its debts.

via Debt ceiling definition from CNBC.

Okay, that’s easy enough to understand. But what does it mean for the economy and what would be the effects of a government default if the debt ceiling isn’t raised? There are varying opinions on what a default would mean but, suffice to say, most economists say it could be extremely harmful to not our our economy but the world’s as well. Here are some possibilities.

–Without an increase in the borrowing limit, the government couldn’t pay other obligations on time, such as Social Security benefits, bills from government contractors and Medicare reimbursements.

– If the government couldn’t pay veterans’ benefits, federal employee salaries or other bills, investors would almost certainly demand higher interest rates at future Treasury auctions. That would drive up the cost to taxpayers of servicing the government’s debt.

– Stock markets would likely fall. Household wealth would shrink. Consumer confidence could plunge. Americans would cut back on spending. Higher rates on government debt would raise other borrowing costs, including mortgage rates.

(Yahoo Finance)

A good many economists and business leaders are saying a long delay in increasing the debt limit is uncharted territory and is a place they have no interest in visiting.
How Australia Handled Its Government Shutdown

Best of Big Frog 104

Recommended For You

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account just click on the account activation button below. You will maintain your existing VIP profile. After you do this, you will be able to always log in to http://bigfrog104.com using your original account information.

*Please note that your prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

(Forgot your password?)

Not a member? Sign up here

Sign up for Big Frog Rewards Club quickly by connecting your Facebook account. It's just as secure and no password to remember!

Sign up to have exclusive Big Frog Rewards Club contests, events, coupons, presales, and much more delivered to you for FREE.