Local leaders react to debt ceiling impact on the economy as they reach an agreement

CHICOPEE, Mass. (WGGB/WSHM) - Western Mass News wanted to know what the impact the debt ceiling agreement could have on your wallet.

State Senator John Velis told us in these situations that the state and local governments are often tasked with picking up the slack if there’s inaction in Washington.

“If something doesn’t get done on the federal level, it trickles down to the state. We’re kindly asked to fill in money and resources,” said Senator Velis. “We are just sitting by, waiting to see if there’s a deal and it sounds like there will be. But God forbid there wasn’t, a Massachusetts taxpayer would be paying a lot of money to fill that void.”

Economics professor Karl Petrick said all kinds of loans including mortgage rates, rental rates, student loans, car loans and other household debts would be affected if a deal is not reached. He talked about one estimate on how damaging it would be if the country defaulted for only one week.

“The consequences on the US economy would have been so bad that over one and a half million jobs would’ve been lost,” said Petrick. That’s about six months of job creation wiped out in a week.”

Petrick added that the best solution would be to find a way where concerns over the debt ceiling aren’t repeatedly happening on a consistent basis.

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