Poly Professor ‘Major Recession’ is Possibility
The U.S. could default on its debt as early as June 1 if the federal government doesn’t raise the debt ceiling. Republican lawmakers have insisted they won’t raise the debt limit without significant spending cuts that Democrats have resisted, leading to a showdown.
Dan Seiver, an economics professor at the Orfalea College of Business at Cal Poly, said the mere threat of the U.S. defaulting on its debt can rattle the stock market and trading in the U.S. dollar.
“If we do not raise the debt ceiling, the U.S. will be forced to default on some or all of its obligations — Treasury securities, and payments for social security, etc.,” Seiver said. “The economy could easily tailspin into a major recession with rising unemployment. At the same time lenders will be less willing to lend to the U.S., meaning interest rates could go even higher.”
Seiver has appeared regularly on the PBS TV program “Nightly Business Report” and is frequently quoted as an economics expert,
While some have argued it’s irresponsible to carry a lot of debt, Seiver said the U.S. economy could not function without it.
“Many Americans have mortgage debt, which is the only way they could afford to own a home,” he said. “Many students have student debt for the same reason. And most corporations have debt, including highly profitable ones, like Google ($14 billion in debt).
“Modern capitalist economies would be much poorer if we all decided to ‘neither a borrower nor lender be.’”
Significant spending cuts, he added, could force Americans to cut back their spending. “And these cuts in spending will then lead to further cuts as businesses see a drop in demand for their goods and services – leading to layoffs spreading through the economy.”
Reducing the debt, he added, would require a surplus in the government budget, entailing a combination of over a trillion dollars of cuts in spending and tax increases. The current debt — which Seiver said is sustainable and serviceable — was incurred by laws approved by both Republican and Democratic presidents.
“It would be irresponsible not to pay what we owe,” Seiver said. “When Americans agree on taxing ourselves more heavily and cutting back future spending, we will have a more ‘responsible’ budget.”
Spokes for Nonprofits’ next “mission-alike” roundtable is on May 31 with a focus on housing programs. Spokes welcomes representatives from nonprofit organizations who aim to provide supportive housing and/or access to affordable housing to those in need.
Mission-alike roundtables are an opportunity for nonprofit organizations in the same sector to network and discuss common challenges, share resources and collaborate for the common good, through a facilitated discussion.
A hallmark feature of the roundtables is a commitment to confidentiality to encourage mutual support and a candid exchange of ideas. Roundtables are 75 minutes long and free to all participants. Limit of two representatives from each organization.
To register, visit the Spokes Event Calendar: https://bit.ly/housingrt
Cuesta Foundation Raises Impressive Funds
The Cuesta College Foundation raised an impressive $109,789 to support the Foundation’s endowment for the Cuesta Assistance for Student Emergencies (CASE) Fund during their 50th Anniversary Celebration.
“We are thrilled with the overwhelming support we received from the community,” said Cuesta College Foundation Executive Director Shannon Hill. “The funds raised will significantly impact the lives of Cuesta College students and help us continue our mission of providing accessible, affordable, and high-quality education to our community.”
The CASE Fund is a vital resource to the campus community providing emergency grants for Cuesta College students facing urgent and unforeseeable expenses that could cause them to drop out of college. The funds raised at the anniversary celebration will allow the Foundation to create an endowment for the fund and provide critical financial support to students in perpetuity.
“I am proud to say that the Cuesta College Foundation is one of the largest and most active in the whole California Community College system,” said Cuesta College Superintendent / President Dr. Jill Stearns. “As I attend meetings with other college leaders across the state, they are always impressed at the level of support our community offers Cuesta and the numerous gifts that the Foundation stewards. Our donors should be proud of that recognition and the Foundation’s accomplishments.”
Recognized at the event were alumni Evan Norton, Adam Watkins, Caren Ray Russom, and Karl Wittstrom who all received the prestigious Honored Alumni Awards.
The Cuesta College Foundation is a non-profit organization that supports the educational mission of Cuesta College by raising funds and promoting community involvement. Since its founding in 1973, the Foundation has raised millions of dollars for student scholarships, programs, and capital projects. It has become one of California’s top ten community college foundations. For more information about the Cuesta College Foundation or to donate, please visit cuesta.edu/give/.