- Monthly budgets might take a hit. Treasury would have to conserve cash and prioritize its payments, endangering the estimated 80 million checks the government pays each month, including 56 million to Social Security beneficiaries and 8.3 million to disabled citizens. The elderly, the disabled and anyone else counting on the government for unemployment assistance, food stamps or other benefits would feel the pinch.
- Federal employees and contractors might not get paid. The federal government also processes an estimated 3.9 million payments each month for federal workers’ salaries as well as 1.8 million to non-defense contractors who do work for the government.
- It might become more difficult to get a job. Consumers might hold back on spending, giving businesses even less confidence to hire people during a time when the economy is already growing at an anemic 1.3 percent. Anyone standing in the unemployment line could find it increasingly difficult to land a job.
- It could become more expensive to get a loan. If the governments defaults on its debt, investors would demand that the Treasury pay them a higher interest rate to compensate for the added risk of lending money to the United States. That would send interest rates higher on mortgage loans, home equity lines of credit and car loans, because Treasury rates act as a benchmark for these and many other types of consumer loans.
- Retirement portfolios might take a hit.
- Local improvement projects could get delayed or cancelled.
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