Debt Limit: Time Is Running Out

Debt Limit: Time Is Running Out

Blacks could find themselves paying higher interest rates and doing without other government-funded services if a resolution isn't found to the debt limit.

Published July 14, 2011

In a sure sign that the debt limit talks between President Obama and Republican congressional leaders have gone sour, White House communications director Dan Pfeiffer tweeted Thursday night that the president will hold his second televised news conference of the week on the issue Friday morning.

 

Their impasse continues even though two credit rating agencies, Standard & Poor’s and Moody’s, are threatening to downgrade the federal government’s top-notch credit rating. If they follow through on those threats, interest rates would soar for both the government and individuals.

 

That means that African-Americans, already feeling pinched by hard times and high unemployment, would be further stressed economically. The interest rates on student loans, mortgages and credit cards would rise significantly. People lucky enough to have a 401K retirement account, will discover it’s worth less.

 

Thinking about buying a car? Those rates would be higher, too. And anyone who’s been using credit cards to get through tight periods might want to find other ways to stretch a dollar. In addition, because the federal government will have to pay higher rates on its debt, it will have less money to fund programs, such as housing, education, transportation and other services that lower-income and middle-class families have come to depend on in these hard times.

 

Wednesday night, when things grew really testy between Obama and House Majority Leader Eric Cantor, the president warned the Virginia Republican to not "call his bluff," and vowed to take his case to the American public. Now he’s about to make good on that pledge. Stay tuned.

(Photo: Chip Somodevilla/Getty Images)

Written by Joyce Jones

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