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Does The #DebtCeiling Affect Us?

July 27, 2011 3 comments

Debt Ceiling – The legal limit by borrowing by the federal government and came into effect in 1917.

Well there seems to be A LOT of talk about this Debt Ceiling with the major question of “How will this affect us?” To start, if the Debt Ceiling is not raised by August 2nd (August 10th the latest), the government will not have enough moolah to pay its bills. What does this mean? Well it simply means that if they cannot pay their bills they will need to go into default on U.S. Treasury Bonds and cause interest rates to rise because the investors in these bonds will request higher interest rates to make up for the higher risk they are taking.

Ways this will affect us:

  1. Interest rates on credit cards will rise (so start paying them off quickly)
  2. Mortgage Rates will increase which could cause buyers to pressure sellers on reducing the price
  3. Borrowing Costs will increase (Consumer Loans, Mortgages, Personnel Loans, Car Loans, etc.)
  4. Our $$ amount will drop causing imported goods to cost more. (Stock up on gas now?)
  5. Lastly expect the stock market to drop

How do you feel about the Debt Ceiling? Should it be raised or should it not? And and what are some precautions you may take? Pay of Debt? It will be interesting to hear some feedback on this.

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