MIAMI (CBSMiami.com) – As South Florida continues to battle record unemployment, especially in Miami-Dade County, Congressional Republicans continue flirting with having the U.S. default on its debt.
And in South Florida, where Medicare and Social Security are a mainstay of many family incomes, this could be disastrous for both personal and community incomes.
But, Tuesday, the GOP-led House of Representatives announced that it would bring a “clean” bill to increase the debt ceiling by $2 trillion for a full House vote next week, according to the Wall Street Journal. The bill would have no spending cuts or caps attached to it.
The idea of a clean bill was first floated by President Obama and Congressional Democrats in the House and Senate jumped on board with the plan as well.
Republican lawmakers wanted to have the vote for it to intentionally fail in the House of Representatives. The GOP said that its members won’t vote to increase the country’s $14.3 trillion debt limit without cuts nearing $2 trillion attached.
By holding the debt limit hostage, the GOP has already forced the United States to reach its debt ceiling. This has forced the Treasury Department to essentially begin juggling the books trying to keep the U.S.’s credit rating afloat.
But, by August 2, if no deal has been reached on the debt limit, the country will default on its debt. This will set in motion a disastrous chain of events that could essentially destroy the United States’ credit rating in the world and plunge the economy deep into a recession and possibly worse.
If the U.S. defaults, other countries will lose confidence in the U.S. economy and begin selling off U.S. assets like treasury bonds and other bond investments. This will drive down the value of all of these products.
It will also likely lead to a hyperinflation of the U.S. dollar meaning the goods you can purchase for a reasonable price on August 1, may jump into record territory by the end of the next week.
Plus, payments to Medicare and the military will have to stop while the government tries to readjust payment schedules to foreign debtors and other mandatory payments. This could serve to skyrocket the costs of health care while the government waits to pay hospitals, doctors, and pharmacies.
Finally, the simple act of borrowing money, from the average consumer to the federal government will cost quite a bit more. Other countries, like China, will lend to the United States again, but will do so at a much higher rate.