Local Impacts of Hitting the Debt Ceiling - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Local Impacts of Hitting the Debt Ceiling

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There's been a lot of talk about hitting the national debt ceiling. Do you know what it is and how it works? It's a lot like your home budget except Congress makes all the decisions.

"Congress decides on what programs it will fund, it decides on how much they'll charge in taxes for revenue and it decides where to set the debt limit at. It does seem that they'd pay more attention when they were passing bills and budgets," said Economics Professor at UNR, Elliott Parker.

And he says they are playing a political game of chicken. You see neither party wants to be the one to name budget cuts.

"The largest programs in the budget are Defense, Social Security and Medicare and neither party wants to call for cuts to any of them. They are all popular and all political and whomever blinks first will see those proposed cuts come back at them in the next election," he says.

If the ceiling is hit and nothing is changed - what would it mean?

"Longer unemployment lines, higher interest rates on everything and there won't be money to pay out Social Security or federal workers or any of it. And that could hurt Wall Street and the world view of the United States as a good investment and that could throw us into an even deeper recession," Parker said.

But then he added.

"But I am optimist and believe people will work it out."

Written by Erin Breen

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