The League community will be negatively affected if the debt ceiling does not increase
On October 7, the United States Senate reached a deal to temporarily raise the debt ceiling by $ 480 billion, giving the U.S. Department of the Treasury enough leeway to continue funding the government until about December 3. The deal was struck after Senate Republicans, led by Mitch McConnell, fall a week of threat to obstruction any attempt by Senate Democrats to permanently raise the debt ceiling.
The debt ceiling is a limit on the amount of debt that the US government can incur. A simple way to think about it would be to imagine the debt ceiling as the government’s credit limit and the national debt as its credit card bill. When Congress increases the debt limit, it increases the government’s maximum credit limit.
While raising the debt ceiling does nothing to solve the long-term debt crisis, putting Congress back to square one and forcing the community of Syracuse, Syracuse University and the nation as a whole into a game precarious waiting. But if the debt ceiling is not raised by December 3, whether temporarily or permanently, the United States would default on its debt, like when someone does not pay their credit card bill. except on a much larger scale. If the government defaults on its debts, it would have no money to meet its financial obligations, which would lead to far-reaching negative effects, such as a loss of federal funding, not only on the community of the League, but on the nation as a whole.
For Syracuse in particular, residents could wait to see rising interest rates, cuts to aid programs and economic turmoil among other potential consequences. Syracuse students could see their student loans affected. With all of this in mind, tackling the debt ceiling demands the full attention of the Syracuse community.
Treasury Secretary Janet Yellen warned in a editorial for the Wall Street Journal that if the government defaults on its debt, it “would produce widespread economic catastrophe.”
“In a few days, millions of Americans could be strapped for cash,” Yellen wrote. “Almost 50 million older people could stop receiving social security checks for some time. The troops might not be paid.
A government default would hit Syracuse hard. Onondaga County is expected to receive nearly $ 168 million federal funding in the last fiscal year. This funding should be widely distributed around Syracuse. Projects such as Title IV-D child support, family assistance programs, and the lead poison control program are all expected to receive federal funding in the next fiscal year. If the federal government defaults and does not meet its financial obligations, we do not know what could happen to the money.
Similar uncertainties could arise for student loan money. If the government were to default on its debt, it would have no more money to meet its financial obligations, which could prevent League students from receiving their designated loans.
A default could also irreparably harm the short- and long-term economic prospects of SU students. As young adults, we are just beginning to enter the marketplace for jobs, homes, cars, and many other essentials. A government default can cause another recession, just as the economy begins to emerge from the recession caused by COVID-19. This level of economic damage could take years to reverse.
The whole is disappointing to say the least, especially given the importance of the debt ceiling. Instead of arming the problem, McConnell should do what’s best for the country by working on a deal with Democrats in Congress to raise the debt ceiling.
The Syracuse community and the nation as a whole cannot afford for the government to default on its debts – it would be disastrous. So please call on your senators and local congressional representatives and urge them to stop playing politics and raise the debt ceiling.
Evan Butow is a second year magazine specializing in news and digital journalism. His column appears every two weeks. He can be contacted at [email protected].
Posted on November 11, 2021 at 12:38 am