Pattye Benson

Community Matters

debt ceiling crisis

Debt-ceiling crisis – America could lose its triple-A credit rating . . . what about Tredyffrin Township and our school district

How do we keep our dominoes from starting to fall and our house of cards from crashing?

The debt battle in Washington is raging. The deadline by which Congress must decide to increase the nation’s debt limit or find ways other than borrowing to pay the interest on the huge national debt, is only days away. The consequences of failure are unthinkable to this country. Whom will Uncle Sam pay if there’s no debt deal – the Veterans, Medicaid beneficiaries, Social Security recipients? The clock is ticking down . . . the country is running out of time.

The finger-pointing . . . the political gamesmanship . . . makes you feel like you’re living in the twilight zone. Some suggest that the U.S. only needs to mint one or two trillion-dollar coins as a plausible way out of the debt-ceiling debate. Or that perhaps President Obama should invoke the 14th Amendment to raise the debt ceiling if Congress cannot come up with a satisfactory plan before the Tuesday deadline.

The standoff between lawmakers goes on – the political posturing and name-calling endless. A very real fiscal catastrophe is at America’s doorstep – and Washington’s stalemate is a disservice to all of us. Americans do not want our government to default on its debt obligations. We want compromise from our lawmakers yet they don’t seem to hear (or care) what we think. Why isn’t Washington listening to the people . . . why is a middle-of-the-road compromise seemingly impossible?

What would a debt default mean for the country, for the state, for our township and our school district?

If the United States does lose its Aaa bond rating, we could potentially see a financial crisis unleashed because it will also mean that there will almost certainly be a wave of credit rating downgrades across the country. Moody’s Investors Service is saying that the U.S. risks losing its Aaa credit rating if it defaults on its debts – even for a short period of time. Whether or not America sees its credit rating downgraded right now, the truth is that at some point, the credit rating of the US is going to go down and interest rates will likely go up.

What’s to stop the ripple effect of a federal government credit downgrade? Nothing . . . the nightmare will not end at the national level. The truth is that the credit ratings of state and local governments across the country will likely be reviewed and downgraded as well. The federal government has never lost its Aaa credit rating; this would be totally uncharted territory.

The national economic nightmare places Tredyffrin Township and the T/E School District in a precarious situation – jeopardizing its Aaa credit rating.

How do we keep our dominoes from starting to fall and our house of cards from crashing?

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