Can somebody explain to me in plain simple English what it means if nothing happens before tomorrow and the US reaches that debt limit?
I know it means the US cannot loan any more money but what does that mean for the American citizens?
Let me explain this from my point of view. I live in a town in Idaho, a smaller town. I can't find numbers but I know that at least 1/4 of the people here rely on some form of government aid to get through the day. I am one of them. My family receives about $500 a month for food. Our children are on Medicaid. Others around here get housing assistance to pay their rent. That assistance ranges from $50 to $1,000 a month depending on various circumstances. All of these programs have enough money to get through October. November is another story. I work. I'm a self-employed accountant. I just barely managed to negotiate with my clients for higher pay and I still can't get all of my bills paid. Losing food stamps for my family means defaulting on a different bill, most likely a credit card bill. For one of my friends who relies on housing assistance AND food stamps, this would mean that their family of 6 (2 parents and 4 kids under the age of 8) would be kicked out of their apartment with no food while the father tries to get to work each day.
In this town of roughly 50,000 people, assuming my estimate of 1/4 using government assistance is correct, (Personally, I feel that ratio is conservative and might closer to 1/2) that means that 12,500 people rely on government subsidies for food and/or rent. Breaking that number into families of 2 adults and 2.3 children, that means there is about 2907 families who get around $300-$1000 a month for food alone. That is $872,100 to $2,907,000 a month in grocery purchases in our podunk town. I don't know of any business that can afford any loss like that. Granted, they shop at various stores but that is still a significant portion of the local economy. That is how I see the shutdown affecting people.
I know there are a lot of assumptions in my math. I wish I could get the actual numbers to back me up. I have erred on the conservative side as stated earlier. I do know that roughly 1 in 4 renters in this town rely on government housing assistance. I also know that if you qualify for housing then you automatically qualify for food assistance. If you qualify for food assistance then your children at least qualify for Medicaid. There are also many more people in my situation who are renting their house from a bank instead of a landlord who do not qualify for housing but do qualify for food assistance.
I did some more digging and found data
to back up my claims. This comes from 2012. Idaho had a reported population of 1,595,728 with 233,034 on Food Stamps alone. The data referenced includes other assistance programs but since my argument was only about Food Stamps, I'm concentrating on that one for now. This means that 14.6% of the population of Idaho is on Food Stamps. The town I live in has a disproportionate population due to rural location and proximity to a Native American Reservation so I still stand by my 25% or higher estimate for my town only. According to that report cited, the average monthly amount is $129.18 per PERSON, not family. This means that $30,103,332.12 was given in food stamps alone for one month. Using the same ratios as the data, my town of 50,000 has an estimated 7,300 people on food stamps spending $943,014 a month. That number is within my estimates previously mentioned.
To put it simply, just over 250,000 in Idaho alone, over 47,000,000 in the entire US, will not be able to pay for food using government programs in November. Grocery stores, notable for having one of the lowest profit margins
in the services sector, cannot afford to lose that sort of money. In the end, it's a big house of cards and Congress is bumping the table in their petty squabble.