Professor On Debt Ceiling: "Default Catastrophic To US Economy" - 47 ABC - Delmarva's Choice

Professor On Debt Ceiling: "Default Catastrophic To US Economy"

Posted: Updated:

WMDT 47 NEWS - Come October 17th, the Treasury will no longer be able to borrow money unless Congress raises the debt ceiling.

The debt ceiling is the limit beyond which our government can not borrow and it's an amount that is mandated by Congress.

"Nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years," said President Barack Obama in his speech on Tuesday. "This is the credit worthiness of the United States we are talking about. This is our word.

"This is our good name. This is real, and the government shutdown millions of Americans face inconvenience or outright hardship."

President Obama said in such a case, every American could see 401Ks and home values fall and student loans rise.

"There would be a significant risk of a very deep recession at a time we are still climbing our way out of the worst recession in our lifetimes," said Obama.

WMDT spoke with Leonard Arvi, an assistant professor of finance at Salisbury University about the possible consequences for not raising the debt ceiling.

"If the government elects not to pay, those people who hold the US debt, those people who have US bonds, then it would amount to a default which would be catastrophic to the US economy and the world economy," said Arvi.

If nothing is done, the Treasury said on November 1st, the federal government will have run out of all its cash-on-hand.   

  • ContestsMore>>

  • VP Shoes Back to School Contest

    VP Shoes Back to School Contest

    Friday, August 15 2014 12:02 AM EDT2014-08-15 04:02:20 GMT
    Winner announced on WMDT 47 News at 12PM on 8/22/14 No purchase necessary. Void where prohibited by law. Odds of winning dependent on number of entries received. Contest Dates: August 15, 2014 – AugustMore >>
    Winner announced on WMDT 47 News at 12PM on 8/22/14 No purchase necessary. Void where prohibited by law. Odds of winning dependent on number of entries received. Contest Dates: August 15, 2014 – AugustMore >>
  • Teacher Who Makes A Difference

    Teacher Who Makes A Difference

    The WMDT 47 Teachers Who Make a Difference Contest is Sponsored by Accurate Optical: "Encouraging children of all ages to come in for an annual eye exam to help them see better in school." Each month weMore >>
    The WMDT 47 "Teachers Who Make a Difference" Sponsored by Accurate Optical Encouraging children of all ages to come in for an annual eye exam to help them see better in school.More >>
  • Free Tuition Contest

    Free Tuition Contest

  • Local NewsDelmarva HeadlinesMore>>

  • Hashtag "X" Campaign Promotes Anti-Texting/Driving

    Hashtag "X" Campaign Promotes Anti Texting/Driving

    Thursday, August 21 2014 12:45 AM EDT2014-08-21 04:45:09 GMT
    SALISBURY, Md. - A twist on an anti-texting while driving campaign is urging teenagers to combine two things they arguably know best: texting and tweeting - neither done while driving, of course.More >>
    SALISBURY, Md. - A new twist on an "anti-texting while driving" campaign is urging teenagers to combine two things they arguably know better anyone: texting and tweeting - neither done while driving, ofMore >>
  • Salisbury City Council Hosts Open Forum For Residents

    Salisbury City Council Hosts Open Forum For Residents

    Wednesday, August 20 2014 11:57 PM EDT2014-08-21 03:57:31 GMT
    SALISBURY, Md. - Residents were able to openly discuss topics important to them at the "Coffee With Your Council" event hosted in Downtown Salisbury.More >>
    SALISBURY, Md. - Residents were able to openly discuss topics important to them at the "Coffee With Your Council" event hosted in Downtown Salisbury.More >>
  • Man Killed, Grandson Injured In Van Crash

    Man Killed, Grandson Injured In Van Crash

    Wednesday, August 20 2014 11:42 PM EDT2014-08-21 03:42:11 GMT
    FRANKFORD, Del. (AP) - Delaware State Police say a man was killed and his 6-year-old grandson was injured when the van he was driving left the road and hit a tree.More >>
    FRANKFORD, Del. (AP) - Delaware State Police say a man was killed and his 6-year-old grandson was injured when the van he was driving left the road and hit a tree.More >>
  • Most Popular StoriesMost Popular StoriesMore>>

  • Maryland Man Charged With DUI After Reported .22 BAC

    Maryland Man Charged With DUI After Reported .22 BAC

    Wednesday, August 20 2014 1:21 PM EDT2014-08-20 17:21:15 GMT
    WEST OCEAN CITY, Md. - Police say alcohol was to blame for an early morning hit and run crash. Maryland State Police - Berlin Barrack says with help from Worcester County Sheriff's Office Deputies, they responded to Bowline Lane in West Ocean City for a reported hit and run collision. Once on scene, Troopers and Deputies found that 30-year-old Ryan Orndorff, of Clarksville, Maryland, was driving a 2008 Ford pick-up truck, when he hit another vehicle while trying to park.More >>
    WEST OCEAN CITY, Md. - Police say alcohol was to blame for an early morning hit and run crash. Maryland State Police - Berlin Barrack says with help from Worcester County Sheriff's Office Deputies, they responded to Bowline Lane in West Ocean City for a reported hit and run collision. Once on scene, Troopers and Deputies found that 30-year-old Ryan Orndorff, of Clarksville, Maryland, was driving a 2008 Ford pick-up truck, when he hit another vehicle while trying to park.More >>
  • Homeless Sex Offenders

    Homeless Sex Offenders

    DELAWARE - Individuals featured in this slideshow are NOT wanted. They are sex offenders who have registered with Delaware State Police as homeless. These are public notifications.More >>
    DELAWARE - Individuals featured in this slideshow are NOT wanted. They are sex offenders who have registered with Delaware State Police as homeless. These are public notifications.More >>
Powered by WorldNow
Powered by WorldNow All content © Copyright 2000 - 2014 WorldNow and WMDT. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.