If an agreement is not reached to increase the nation’s debt ceiling, local college professors warn the ramifications of a government default would be felt throughout the nation.
“There would a direct impact on all of us,” said Kerry Gatlin, dean of the University of North Alabama College of Business. “Banks would tighten up lending even more, making it difficult to get a loan. Variable interest rates on credit cards and loans would increase.”
Gatlin said if the federal government is unable to increase its debt to continue paying for programs already authorized by Congress, stock markets would tumble and corporations would have to lay off employees to save money.
“It could push us back into a recession and unemployment would increase,” he said.