- Iowans Mark National Walking Day
- Signs You're an Insomniac
- Corridor Schools' Frustrating Wait For Funding
- Iran Nuclear Talks Push Past Deadline
- Workers Monitored For Ebola Released
- Bill Cuts HIV Funding, Boosts Abstinence Ed.
- Schools Caught in Lawmaker Gridlock
- Window Narrows for IA Gun Law Changes
- CR Wants Input on Flood Control System
- Sen. Ernst Tours Kinze Manufacturing
- UI Warning of Tax Fraud
- Helping Parents Pay for Summer Camp
- Amazon Pushes New Dash Button
- Controversial Game Supports STEM Carreers
- Digging for History In Amana
- Senate Passes Anti-Bullying Bill
- Man Gets 10 YRS After Kidnapping Conviction
- Northern Virginia Manhunt Ends
- Masonville Man Facing Sex Abuse Charges
- BNSF Making Safety Changes
- Centuries-Old IA Church Destroyed
- School Start Date Bill Passed
- Gov. Confident He'll See Bully Bill
- Netflix Announces April Titles
- Group Calls for Tough Teen Driving Rules
- New Anti-Smoking Campaign Launched
- BMW Driver Identified In Police Shooting
- Iowan Sees Controversy As Opportunity
- Rubio Announcement Coming April 13
- Clinton Advisers Traveling To Iowa
- Man Drinks 36 beers, slams into house
- UPDATE: Man Shot By Police Identified
- Volunteers Explore Opportunities
- Airport to be Iowa's First Super Park
- Local Reaction to New Cancer Treatment
- Linn County to Offer Free STI Testing
- Winneshiek County Gathers Info on Sand
- House Panel Approves Adoption Leave Bill
- IA Senate Panel OKs Strip Search Bill
- Missing Cedar Rapids Man
- Stocks Surge on Spending Signs
- Branstad Seeks To Boost STEM Education
- 1 Killed in Incident at NSA
- New Empty IA Prison Records
- Efforts to Find Plane Crash Victims Continues
- Waterloo Has Highest Jobless Rate for IA Metros
- Trevor Noah Named 'Daily Show' Host
- Fiorina Almost Ready to Run
- Going Meatless on Mondays
- Mandatory Age To Stop Driving
UI Economist: No Financial Fiasco
Updated: Thursday, October 10 2013, 06:38 PM CDT
IOWA CITY, IA (CBS2/FOX28) -- While furloughed families are struggling to make ends meet without paychecks and those on WIC are wondering where their child's next meal with come from -- at an overall economic level -- America is not headed for another financial fiasco if the government does not raise the debt ceiling by October 17, said University of Iowa Associate Professor of Finance Art Durnev.
Durnev studies the intersection of politics and business, and says, Americans need to differentiate between the government's inability to pay its bills, and an unwillingness to pay them.
"So what we have here is just unwillingness to pay," Durnev said.
Think of it like missing a credit card payment, Durnev said. The worst thing that happens is interest rates increase. So, the country might see interest rates increase by a half percent -- and the Federal Reserve is prepared for that, Durnev said.
"No, we should not be worried about (that), and be very selective when you read any sort of news right now," Durnev said.
America's biggest investors, Japan and China, might be wary of doling out money in the future, but Durnev said, the country will still be able to get credit.
Still, the shutdown is taking its toll. Mary MacNeil's son and daughter-in-law work for the Centers for Disease Control and haven't been paid in two weeks.
"They are having a very hard time managing their money when nothing's coming in," MacNeil said.
That will be the biggest problem -- a drop in consumer spending because of furloughs and fear, Durnev said. He knows people are worried about their retirement accounts, too, and has some practical advice: if you can, spend less and save more.
"Don't follow the crowd. If you invest in stocks, keep your money in stocks. Hopefully, hopefully the situation, everything will recover," Durnev said.