Washington, DC – The extreme MAGA House Majority is threatening to manufacture a catastrophic default crisis and economic collapse. To hold the economy hostage, the House passed a long list of hugely unpopular and extreme ransom demands that promise pain for millions of average Americans including veterans, seniors, students, children, workers, and the food insecure. They voted to ship 100,000 high paying manufacturing jobs overseas while going out of their way to protect wealthy tax cheats. The MAGA Majority’s proposed cuts are untenable, unworkable, and unserious, especially as they leave in place costly tax breaks for billionaires and big corporations. With the nation now projected to run out of money as early as June 1st, Accountable.US’ Cost Of MAGA Default’ project continues to underscore the catastrophic consequences of a MAGA default that grows closer by the day.
Today In Focus: MAGA Default Would Skyrocket Interest Rates For Consumer Loans
There Were Serious Economic Effects From The 2011 Debt Ceiling Crisis Even Though Default Was Ultimately Avoided, Including Higher Rates For Mortgages, Auto Loans, Personal Loans, And Other Consumer Financial Products.
- In The 2011 Debt Ceiling Standoff, In Which Default Was Avoided, “Market Risk Measures Rose Persistently” And Consumer And Small Business Optimism Fell. “In the run-up to and aftermath of the 2011 debt ceiling crisis—where the country ultimately avoided a default—market risk measures rose persistently, and measures of consumer confidence and small business optimism weakened.“ [The White House, 10/06/21]
- For Two Months Following The 2011 Debt Ceiling Standoff, Mortgage Rates Rose By 0.7 To 0.8 Percentage Points, Increasing Interest Payments By As Much As $30,000 For A Family With A $250,000 30-Year Fixed Rate Mortgage. “Mortgage rates rose by between 0.7 and 0.8 percentage point for two months after that year’s debt ceiling crisis passed, and only declined slowly thereafter. For a family taking out a $250,000 30-year fixed-rate mortgage, an extra 0.8 percentage point means more than $30,000 in additional interest payments over the life of the loan.” [The White House, 10/06/21]
- For Months After The 2011 Crisis, Interest Rates For “Auto Loans, Personal Loans, And Other Consumer Financial Products Also Rose.” “Rates for auto loans, personal loans, and other consumer financial products also rose in the wake of the 2011 crisis, and these increases often lasted for months.” [The White House, 10/06/21]
BACKGROUND: Accountable.US’ ‘Cost of MAGA Default’ project puts a daily spotlight on specific harms the MAGA Majority’s default plan and brinkmanship will bring for Main Street and Wall Street alike – from tanking markets, frozen credit, lost jobs, disruptions to critical benefits like Social Security, and soaring interest rates on everything from car loans to mortgages. While the MAGA Majority claims they are holding the economy hostage over supposed debt ‘concerns,’ they insist on harmful cuts – crafted by the far-right House Freedom Caucus – aimed at average Americans while protecting and even expanding debt ballooning tax breaks for billionaires and big corporations that profiteer and ship U.S. jobs overseas. The clock is ticking. The MAGA majority should stop playing dangerous political games with American lives and the economy and responsibly pass a clean bill that allows the nation to pay its bills. The sooner they do, the less damage will be inflicted on Americans of all walks of life.