INDICE DE GALERIAS
FOREST CITY, Iowa - We're in the 10th day of the federal government shutdown, and in 7 days, we'll hit the debt ceiling deadline; when the government will either have to raise the debt limit or default on loans.
So, as you can imagine there's a lot of confusion on how or if the two are related.
It’s a lot of information to take in.
So what does that mean? And why should we care?
Well hopefully, we can help clear up some of these questions.
When it comes to explaining what the debt ceiling is, it's easiest to use an analogy.
Think of it like a credit card, which has a spending limit. Well, so does the U.S. government, and they're about to reach theirs.
"It's an imposed limit by Congress on how much the government is allowed to borrow,” says History Instructor, Dr. James Scarry.
And in one week we hit that limit unless the ceiling is raised.
If it's not, for the first time in history the country would default.
So no one really knows exactly what would happen, but experts just know it won't be good.
"Your social security if involved, your 401ks are involved, your IRAs are involved, your mutual funds are involved, any kind of investments that you have that involve anything other than stocks are going to be involved here,” adds Dr. Scarry.
House Republican leaders have said they will offer a temporary increase in the federal debt ceiling in exchange for negotiations with the President, however, President Obama says he would be open to a short term solution but would only consider negotiations for a long term solution after Congress decides to fund the government.
"the President has sort of lumped them together as one issues as one issue and said, we need to do both of these things. Reopen the government and raise the debt limit before I will negotiate,” explains Dr. Scarry.
"No body is going to get out of the deal 100% what they want,” says Dr. Eric Shoars
Shoars, a political analyst, says the leadership styles of the President and Republican leaders in Washington are working against each other.
"Each side is going to have to give a little and right now the Democrats don't feel like they have to give and the President feels that he never should give,” adds Shoars.
He says if the Republicans want negotiations they need to turn their focus to the Democrats instead of just the president.
"In politics it's all about the optics and no body wants to look bad and if the Democrats believe the optics are against them that they're looking bad, you may have some Democrats come across the aisle and start negotiating,” he continues.
Now if the debt ceiling is not raised and we default, it's going to mean bad news for the economy. Possible consequences are that the financial markets sink and social security checks get delayed, and eventually the economy could slip into another recession.
Meanwhile, the stock market is reacting to the talks in Washington, after house Republicans said they would advance legislation that would temporarily extend the government's borrowing authority or debt ceiling.
The market closed higher today and had its best day since January 2nd
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