75: “Catastrophic” Consequences of the US Defaulting on Its Debt w/Sarah Ewall-Wice

The US debt ceiling has been hit; what happens next could send ripples through the economy. But is now the time to panic? Or is there still time to solve this situation? With the US economy relying so heavily on borrowing, the prospect of being unable to pay back its debts could come with a series of “catastrophic” consequences. Higher mortgage rates, a market crash, and an even harsher recession could be on the horizon. But what’s the likelihood of this happening? And are we really on the cusp of a debt debacle? We brought on Sarah Ewall-Wice, Washington D.C.-based reporter, to help explain what is happening with the US debt limit. Sarah knows that many Americans are used to these types of debt ceiling congressional debates, but most people don’t know the impact these could have on their wealth, investments, and society as a whole. With COVID spending forcing the government to pay for even more, the debt ceiling has reached an almost unimaginable $31 trillion. Sarah describes what would happen if the US defaulted on its debt, the programs that would be impacted the most, what republicans and democrats both want in their upcoming debates, and what everyday Americans can expect to happen over the coming months. Dave and Sarah also discuss the “trillion dollar coin” method, which could end the US’s debt quite quickly, while simultaneously acting as the most comical government bailout plan to date! In This Episode We Cover The US debt ceiling explained and why the government could raise the limit yet again COVID’s effect on government debt and how spending was ramped up during 2020  The “extraordinary measures” that the treasury is putting in place to keep the government afloat  What happens if the US defaults on its debt and the severe consequences for investors  Which social programs will be hit the hardest if a default happens Market crashes, mortgage rate increases, and other effects we could be in for The “trillion dollar coin” method and whether money-printing is the answer  What republicans and democrats really want and why they’re fighting for it   And So Much More! Links from the Show Find an Investor-Friendly Real Estate Agent BiggerPockets Forums BiggerPockets Agent BiggerPockets Bootcamps Join BiggerPockets for FREE On The Market Join the Future of Real Estate Investing with Fundrise Connect with Other Investors in the “On The Market” Forums Subscribe to The “On The Market” YouTube Channel Dave’s BiggerPockets Profile Dave’s Instagram The 2023 State of Real Estate Investing Report Connect with Sarah: Sarah's Twitter Sarah's Instagram CBS News Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-75 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices