BOWLING GREEN, Ky. (WBKO) -- This wasn't the first time Congress was faced with the task of raising the debt ceiling, but a local expert on economics said this time was different.
"It's kind of the perfect storm. We don't have a budget. Congress doesn't know what it wants to spend, or at least it hasn't told us what it wants to spend, and it has no ability to borrow unless it changes its mind, so it's really an even bigger problem than last time," said WKU BB&T Professor of the Study of Capitalism Brian Strow.
Before Congress made Wednesday's agreement, the country faced something Strow said has never happened in the U.S., a default on its loans. Strow, knowing the consequences of a default, expected them to make a deal, or make some arrangement to prevent it from happening.
"I don't think we're going to default. I think there are measurements the government could take in the short-term to avoid that default. Now it might mean not sending out social security checks. So it's some very drastic things that could affect people in a very bad way, but I do think the government would do that before they decided not to pay interest on the debts we owe, just because the economic consequences of actually going through a default would be catastrophic," said Strow.
Consequences like slow economic growth, less job creation, and a ruined credit rating.
"Losing your credit rating or losing your credibility on paying your debts on time is not something you'd get back very easily," said Strow.
He also said the U.S. is not out of the woods yet.
"The bigger point is even a debt solution if they have one, a debt ceiling solution only lasts until about January or February of next year, so expect a rerun later on in about six months," said Strow.
Strow said Congress coming to an agreement means it may no longer have to cut back on more programs to avoid defaulting, at least for now.
He said in order to avoid raising the debt ceiling again, Congress and President Obama will have to agree on a bipartisan long-term solution.