What the US debt ceiling debate means to a Filipino immigrant
Air time over the past few weeks has been dominated by debates in Washington DC between President Obama and the Republicans on the debt ceiling. President Obama, warned last Monday that interest rates on home mortgages and credit cards, among others, would rise if no agreement on how to deal with the deficit budget is reached by Aug. 2, 2011.
With a financial crisis threatening millions of Americans, what does this actually mean to an ordinary Filipino immigrant?
Jason entered the United States as a registered nurse in 2004. He was able to petition his wife to join him and all their three children were subsequently born in the US.
Jason’s losses
He bought a home after two years. He also bought a second house in Las Vegas as an investment. But during the 2009 housing crisis, both homes were foreclosed by the banks. He is now back to renting a home.
Watching the news, Jason is feeling the pressure of another financial crisis. If the budget deficit is not resolved, interest rates on home mortgages, credit cards and car loans could increase.
His credit cards are already hitting their limits. He may find it difficult to obtain a new loan because of his credit history showing previous foreclosures. The only way he can pay all his debts and sustain the living standards of his family is for him to earn more.
Unfortunately, even for nurses, the job market does not look good.
His current salary is just enough to pay his household expenses. Considering the volatile job market and State budget cuts, he is anxious about a possible lay off.
Jason is still lucky to have a job. Many immigrants are now unemployed.
Mortgages and credit cards
Anyone with outstanding loans or credit balances, will necessarily be threatened by any increase in interest rates caused by the fight in Washington.
This could happen because of the ripple effect that a downgrade in US credit rating will have on consumer loans. Any increase in interest rates on mortgages and credit cards will have immediate serious impact on an immigrant earning a modest income.
The Democrats and the Republicans cannot agree on a strategy on how to solve the budget deficit. While President Obama wants a combination of cutting expenses and raising the taxes, many Republicans are firm on their stand that there should be no new taxes. The impasse is already affecting the markets.
The impact on us
While we normally go on with our daily life and go to work every day oblivious to the happenings in Washington, the impasse between President Obama and Congress gives rise to the threat of a US default on its obligations. A resulting credit downgrade will cause a rise in interest rates not only for government loans but also for consumer loans. The budget impasse also necessarily threatens jobs both in and out of government. For us immigrants, the budget battle in Washington is no longer just political theater. The threat to the immigrant’s standard of living is real. The effect of what happens in Washington will be felt in the pockets of each and everyone of us.
(Tancinco may be reached at [email protected] or at 887 7177)
