The debt default debate continues to rage in Congress as we barrel towards defaulting on our debt obligations. At this point I’m ready to call a repeal on every single member of Congress – no matter what party they are in. I think that it’s absolutely disgusting that the people we elected to be in office to represent us are not doing their jobs. We should never reach a point when we are only days away from a default. We are already putting the world on edge and having a negative impact on our economy – the very thing that these morons say that they are trying to prevent.
Now, I realize that many of us don’t know what the big deal is. So you pay your bills late, so what? Well, it’s not like paying the cable company when you default on your debts as one of the world’s superpowers. I feel a need to bring it down to Joe Taxpayer level so that we all understand what’s at stake for all of us if the U.S. throws a crap shoot. It’s quick and dirty, and you might not like it.
- Social Security Checks Won’t Go Out
Does grandma get either Social Security retirement or disability? Well tell grandma to start couch fishing, cashing in the coke cans and picking up pennies because her check won’t be in the mail. But wait, isn’t Social Security different from the other stuff in the whole debt thing? I mean, isn’t there a tax specifically to put money into Social Security? Yes, there is…but guess what? The government borrowed from Social Security and if it isn’t paying any debts, that includes grandma’s “guaranteed” money. Sorry granny, better luck next time.
- Value of U.S. Dollar Drops Like Lead
Remember when the U.S. dollar would get like $1.50 in Canadian dollars? Now if you go to Canada your $1 is only worth $0.95 in Canada. You’ll long for those days because the value of the dollar will continue to fall and fall fast. Everything that you buy that comes from overseas will cost you more. I’m not talking about just the BMW that you’ve been drooling on. I’m talking about all the other stuff that’s doesn’t carry a Made in the U.S.A. tag. You know, things like just about everything in Walmart. Kiss those low, low prices goodbye. Oh and if you think that gas is expensive now, get out a mortgage!
- U.S. Downgraded by Rating Agencies
There are a couple of agencies that rate what the likelihood is of an entity defaulting. Right now, the U.S. is rated really, really highly saying that there’s never a chance in hell that the U.S. would default on its debts. Why would it be rated any differently? We never have before. Well, if we do default expect that all to change. How does that affect you? Here’s the juicy part. The U.S. will have to pay a higher interest rate to borrow money. It’s kind of like if you don’t pay your credit card the credit card company jacks up the rate to like 29.99%. If the U.S. has to pay more then guess what, so do you! Have a student loan? Interest rate goes higher. Getting a mortgage? Expect to pay a higher rate. Adjustable rate mortgage or credit card? Kiss your current rate goodbye. Have a savings account? Expect to get an even LOWER return. Well even if the U.S. doesn’t default this could still happen. Agencies are threatening to downgrade the U.S. debt rating even if we don’t default…all based on the amount of debt that, our spending habits, and the idiots that we have in office.
- People Lose Paychecks
Work for the government? You might get furloughed since the government won’t be able to issue you a paycheck. That will affect federal employees as well as the military. That’s a substantial amount of people and families that won’t be able to pay their bills because a check will not be in the mail.
- Investment Account Balances Drop
The stock market could dramatically fall taking the value of your 401(k), IRA or whatever you have investment in the market with it.
Now, I’m just listing the few that would affect most of us. As you can guess, I’m more than a little pissed off about this whole thing and if you are too then you should pick up the phone and call the schmuck that you elected to be in office. It doesn’t matter what party they’re in. Let them know that you’re tired of this political posturing and you want action now.
Join the newsletter
Subscribe to get our latest content by email.