Tyler Schipper, economics professor at the University of St. Thomas College of Arts and Sciences, recently spoke with KARE 11 to help explain how a debt ceiling default would directly impact the average individual or family, if it were to occur.
From the story:
The impacts could be endless. If the U.S. were to default on its debt, economists say in the short term, it could delay payments for federal benefits like Social Security, and paychecks for federal employees and the military. And any business that does work for the federal government may not get paid until everything gets figured out.
“That can have real impacts on whether you keep hiring people or whether you have to lay people off until you do get paid.”
In the medium term, economists say we would likely see a drop in the stock market, affecting millions of retirement accounts and savings accounts. Companies would likely be forced to cut jobs. Moody Analytics forecasts a default would wipe out nearly 6 million American jobs.
“This would almost surely push us into a recession. It’s hard to imagine a default scenario where it doesn’t put us into recession.”