Federal debt crisis could impact central Wisconsin
STEVENS POINT (WAOW) -
Two weeks into the government shutdown, another deadline is looming. The federal debt ceiling will be reached on Thursday. If Congress doesn't raise the debt limit, central Wisconsin would feel the economic impact.
University of Wisconsin-Stevens Point Professor Randy Cray explains it simply.
"If the federal government's expenditures are higher than its revenues, it has to find the money to finance that gap," said Cray.
Other countries like China and Japan have been paying to fill that gap. Many Americans loaned to the government, too.
"Banks, insurance companies, anyone that holds a U.S. Treasure security is in effect making a loan to Uncle Sam," said Cray.
Now, the government had to find a way to pay its creditors. The federal debt limit will be hit on October 17th.
This isn't a new problem.
"From George Washington to Barrack Obama, we've piled up over sixteen trillion dollars worth of debt," said Cray.
The debt crisis has been fixed before.
"Approximately 20 some times, the debt limit of the United States has been raised by the Congress of the United States."
But this time, a core issue intensifies the battle.
"The Republicans have tried to use the debt ceiling and shutting down the government as leverage to de-fund Obamacare."
If Congress doesn't raise the debt limit and pay its bills, central Wisconsin could feel the effects. Our dollar bills wouldn't be worth as much, thanks to inflation.
"Mortgage rates would go up, car loans would go up, student loans would go up, higher interest rates would be very crippling to our economy," said Cray.
But Cray is optimistic that won't happen.
"I look for the government to make every attempt to pay its debt obligations first because it's required to constitutionally," said Cray.
He says it's not a matter of if, but when, Congress raises the debt ceiling.