July 25, 2011
Washington, D.C. – Nevada Senator Harry Reid is working non-stop to avoid our nation defaulting on its financial obligations, which would have a devastating impact on all Nevadans. Seniors could lose their Social Security checks. Medicare benefits could be in jeopardy. Nevada’s active duty and reserve troops could stop receiving payments for their service to our country. Middle class families could see their credit card interest and mortgage payments increase.
Nevadans cannot afford for our nation to default on its financial obligations. Yet, Washington Republicans insist on playing a dangerous game of chicken.
HOW WOULD A DEFAULT AFFECT NEVADA?
· 408,113 Nevada seniors are in danger of having their Social Security benefits disrupted
· 340,198 Nevada seniors who rely on Medicare could have their benefits in jeopardy
· 243,867 Nevada veterans would be at risk of having their benefits disrupted
· 1,374 of Nevada’s active duty and reserve troops could stop receiving pay checks
· Nevada’s families could see their mortgage payments increase by more than $1,000
· Nevada’s families could see their credit card interest increase by $250
REPUBLICANS ATTEMPT TO DOWNPLAY AFFECT OF DEFAULT
In the Case of Default, “Any Solution Would Require Deep Cuts” to Medicare and Social Security. In the case of default, whether the Treasury Department chooses to prioritize payments to creditors or not, “any solution would require deep cuts to the two giant entitlement programs for the elderly, Medicare and Social Security.” [National Journal, 5/27/11]
Default Could Raise Interest and Mortgage Rates And Cost Economy 800,000 Jobs Every Year. “A serious and extended debt ceiling breach could lead big U.S. bond investors such as China to demand higher interest rates, which would in turn mean higher borrowing rates for businesses and consumers. That would inevitably lead to slower economic growth, fewer jobs, higher mortgage rates and perhaps a prolonged double-dip recession — or even a depression. The long-term damage of even a slight increase in interest rates could be enormous. It could cause a 1 percent increase in interest rates that economists said could shave nearly 1 percent off economic growth and cost 800,000 jobs every year.” [Politico, 7/18/11]
The Head of the IMF Said Default Would Be “A Real Shock,” “Bad News for the U.S. Economy.” On ABC’s This Week, IMF Head Christine Lagarde Said “It would be a real shock, and it would be bad news for the U.S. economy. So I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also of the rest of the world.” [This Week, 7/10/11]
Moody’s Economist Mark Zandi: Failure To Raise the Debt Ceiling Would Throw The US into a Recession. At a Breakfast, Moody’s Economist Mark Zandi said, ““Even if Congress and the administration reverses themselves days later I think the damage will have been serious and we’ll probably be thrown into a recession.” [The Hill, 6/28/11]
235 Economists Including Six Nobel Laureates: Failure To Raise The Debt Ceiling “Could Push The United States Back Into Recession” ”We, the undersigned economists, urge Congress to raise the federal debt limit immediately and without attaching drastic and potentially dangerous reductions in federal spending. Not doing so promptly could have a substantial negative impact on economic growth at a time when the economy looks a bit shaky. In a worst case, it could push the United States back into recession.” [Economists’ Letter to Congress, 6/29/11]