Apparently, some of our representatives still oppose any increase in the debt ceiling, and it may very well be the end of the U.S., even if a resolution is passed in time.
It’s hard to overstate how huge an impact an event like this can have on our economy. When a country delays on some of its payments, the rating agencies count it as a default.
Even if we pay all our bills to debt-holders one day after we’d promised, it will significantly lower our debt rating.
A debt rating is a measure of how “good” the debt is — how likely the lender will get its money.
An AAA rating — which the U.S. currently holds — is the best you can have as a debt-issuer. It means the issuer doesn’t have to pay much interest.
If we default at all, our credit rating will plummet.
If we’re going to get a loan at all in the future, we’d have to pay insane interest rates.
If we default — even a little — it will cost massive amounts of money in the future.
No reasonable, well-educated person would consider a proposition that would destroy the lives of countless Americans, strongly interfere with global trade, remove the dollar from its coveted reserve currency standing and send our already fragile economy on a downward spiral.
In a very public way, our president has made it clear to everyone that this is not an acceptable option. This is interesting because in 2006 he opposed a debt ceiling increase as a senator. According to The Huffington Post, White House spokesman Jay Carney claims the president now considers the vote a mistake.
Ben Bernanke, the head of the Federal Reserve, essentially controls our financial system and he has spoken to politicians at least twice officially on the matter and described a possible default as, “a calamitous burn.”
Devin Graham is a 22-year-old economics senior from Prairieville. Follow him on Twitter @TDR_dgraham.
 
————
Contact Devin Graham at [email protected]