Financial Analysts Worry About Impact Of Potential Government Default

PITTSBURGH (KDKA) — As politicians in Washington fail to compromise on the nation’s debt ceiling, local financial analysts worry about the impact on us.

“If the United States Treasury does default on its debt, then there could be serious ramifications, repercussions for every individual watching,” Rick Applegate, a financial planner, said. “It starts with the inability to pay those people with Social Security, those people who receive military pay, government workers — it just continues to spill on down the line.”

Applegate says that’s bad enough, but 401ks, pensions and investments in the stock market could take a big hit.

“If this comes to fruition, you could actually lose a substantial amount of money quickly, given the decline that is going to occur,” he said.

Financial advisor Bob Fragasso says even those with no government check or market investments will feel the impact.

“Interest rates will go up because our credit worthiness in the world will be questioned as a result of our inability to fund maturing bonds,” he explained. “What does that mean to a homeowner? All interest rates will go up, charge card interest rates will go up, mortgage interest rates will go up because the market will drive it. It will be very costly to the average person.”

Both advisors say there’s not much you can do to protect yourself either because it’s difficult to pull out of the market and re-enter it without losing more money.

So what can you do right now?

“Tell your elected representatives who are responsible to you what you think should happen, financially,” Fragasso said. “You’ve got a very vested stake in doing that.”

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Comments

One Comment

  1. Jeff says:

    God save us please!!!

  2. hwright says:

    Dont Believe the RICH REPUBLICAN LIARS!!!!!! They just want you to hate the Obama administration when it is purely the fault of the Republicans… They dont want to close the loopholes in the taxing for corporations! To many of them work out of the Cayman Islands at the Uglund house and pay no US tax. We need that Revenue back and the Republicans are fighting it tooth and nail…..

    1. Warlock Jones says:

      People that have pensions are the only rich ones left… so tax the union pensions. As obama say… “shared sacrafice”.

  3. IT'S GETTING OLD says:

    4 years democrat majority in the house and senate almost 3 years of Obama, stop making excuses and blaming RICH REPUBLICAN LIARS .
    Maybe you can blame Bush oh no that don’t work anymore 4 years majority in both houses 3 years Obama , I know it’s the Rich Republican LIARS FAULT.

  4. your old says:

    Do you even see whats going on in the House right now? Nothing but a fight over closing the tax loop holes for corporations! The Republicans will not approve that. They rather support wall street and the rich and forget about the public. Their main goal right now is to make Obama look bad! Only this year does it look bad that the debt ceiling is raised. Of course, make it look bad, but Bush junior raised it 8 times??????? Go figure. The republican legislature that is in right now has raised it 18 times. WHY IS IT SO BAD NOW????? PURE REPUBLICAN LIARS

    1. Mad Hatter says:

      Hey Ding Dong, we are all (well those of us that work and save for retirement) tied to Wall Street. If you ever want to retire you best hope it does well.

  5. your old says:

    Typical republican response name calling and only worried about himself.

  6. Timmy says:

    Only 50% of people pay any income taxes. They are ALREADY paying for almost all of the federal government and Obama wants them to pay more? And, he talks about balanced approach!!!!! ???? They have no skin in the game. Finally the real taxpayers are saying….no more!

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