JACKSONVILLE, Fla. -- If you thought the fiscal cliff fight was tough, UNF economist Dr. Andres Gallo says we haven't seen anything yet.
"So if we thought that the fiscal cliff was bad for the economy, the debt ceiling, the non-approval of the debt ceiling increase will be catastrophic," he said.
The secretary of the treasury says the government has officially reached the $16.4 trillion debt limit, which means Congress must now vote to raise the debt ceiling to pay government salaries and other bills.
Gallo said, "It's like when you call your bank and try to get an extension on the limit of your credit card."
But from whom are we borrowing that money? Gallo says it comes from investors, government bonds, and possibly your retirement plans. "For example, most people in the 401ks, other pension plans will be investing in government bonds."
He says Congress has already authorized the expenditures the current debt ceiling can't cover. And without increasing it, big trouble lies ahead. "If you don't authorize the increase on the debt limit, that's very serious because what that means is that the government cannot pay the bills. And that means is that government will shut down."
