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Hello, this is Martin O’Malley. I’m the governor of the great state of Maryland and
the Chair of the Democratic Governors Association
Joined by Governor Brian Schweitzer from Montana and Governor Dannel Malloy from Connecticut.
We have a number of questions that have come
in from many of our DGA supporters throughout the country.
We’re going to read through a few of them
and do our best to answer them succinctly and online here.
First question is: What happens to state government
finances if the national debt ceiling is not raised?
Governor Schweitzer, this comes from, by the
way, Jim from Monrovia, Maryland.
But I think - we were talking earlier – it’s hard to say exactly how this ripples in terms
of consumer confidence and foreign investors who buy our debt.
Any other thoughts on how this ripples across
the states?
Well just about everybody in America borrows money. You’ve got a home mortgage, you have
a car loan, you have some other loans.
The ripple effect is that interest rates are going to go up.
Interest rates are going to go up for governments,
interest rates are going to go up for small business, interest rates are going to go up
for consumers.
And it means that you’re paying not 6% anymore on your home mortgage, you’re paying 9%
or 11% or 13%.
Those are dollars that you can’t invest in your child’s education. Those are dollars
that you can’t invest in home improvement.
Those are dollars that you can’t make your car loan.
So this becomes a roundabout tax because everybody’s
consumer credit goes way through the roof.
Consumer credit and small businesses would be destroyed.