The SU community will be negatively affected if the debt ceiling does not increase
On October 7, the US Senate reached an agreement to temporarily raise the debt ceiling by $480 billion, giving the US Treasury Department enough headroom to continue funding the government until around December 3. The deal was reached after Senate Republicans, led by Mitch McConnell, fall threat of a week obstruction any attempt by Senate Democrats to permanently raise the debt ceiling.
The debt ceiling is a limit on the amount of debt 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 their credit card bill. When Congress raises the debt ceiling, it raises the government’s maximum credit limit.
While raising the debt ceiling does nothing to solve the long-term debt crisis, it puts Congress back to square one and forces the Syracuse community, Syracuse University, and the nation as a whole to a precarious waiting game. But if the debt ceiling isn’t raised by December 3, either temporarily or permanently, the United States will default on its debt, like when a person doesn’t pay their credit card bill. , except on a much larger scale. If the government did not repay its debts, it would have no money to meet its financial obligations, which would have 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 specifically, residents could wait see rising interest rates, cuts to aid programs and economic strife, among other potential consequences. Syracuse students could see their student loans affected. Given all of this, the fight against 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 defaulted on its debt, “it would produce widespread economic catastrophe”.
“Within days, millions of Americans could run out of money,” Yellen wrote. “Nearly 50 million seniors could stop receiving Social Security checks for a while. 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 program are all expected to receive federal funding in the next fiscal year. If the federal government defaults and defaults on its financial obligations, it is unclear what might happen to the money.
Similar uncertainties could befall student loan money. If the government were to default on its debt, it would run out of money to meet its financial obligations, which could prevent SU students from receiving their designated loans.
Failure to pay could also irreparably damage the short- and long-term economic prospects of SU students. As young adults, we are just beginning to enter the market 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 overall picture is disappointing to say the least, especially given the size of the debt ceiling. Instead of weaponizing the issue, McConnell should do what’s best for the country by working a deal with congressional Democrats to raise the debt ceiling.
The Syracuse community and the nation as a whole cannot afford for the government to default on its debts – that would be disastrous. So please call your local senators and congressmen and urge them to stop the political games and raise the debt ceiling.
Evan Butow is a sophomore magazine, specializing in current affairs and digital journalism. His column appears every two weeks. He can be reached at [email protected].
Published on November 11, 2021 at 00:38