South Carolina Credit Ranking In Jeopardy
COLUMBIA, S.C. (WOLO) — “Politicians play football with all sorts of issues, but this is one in which the full faith and credit of the United States, at the end of the day is on the line, says Charles Finocchiaro, Political Sciene Assistant Professor at the University of South Carolina. That’s also true for South Carolina, the state is currently facing a 20 billion dollar budget deficit and the threat of a credit ranking downgrade. But how did the state get here? State financial leader say, it’s simple, the state relies too much on federal money. “We have as a state, overspent that federal money and we’ve been only too glad to make ourselves dependent on that federal money,” says State Comptroller, Richard Eckstrom. Eckstrom says, this is especially true because the state makes funding promises it can’t keep, one specific area, unemployment benefits. “State officials in the past have thought of this as free money, and it’s not free money,” says Eckstrom. Yet now, that money is drying up and Moody’s Investor Service is threatening to lower the state’s credit ranking. But why does this matter to you? If the state’s credit score goes down, borrowing costs go up, which in turn will cause taxypayers to shell out even more money. And that’s not all, if the Federal Government’s credit ranking decreases, the treasury rate goes with it. This will eventually hit your wallet. “Car loans will increase, credit card loans will increase and even mortgage loans will increase,” says Eckstrom. But is there an answer to the problem? “There is no silver bullet, there isn’t one solution,” says Eckstrom. Yet Eckstrom says there is one thing that must be done, stop spending money that’s not there to spend. “My passion and my hope is that Washington will reign in it’s overspending just like we have had to do here at the state level, ” says Eckstrom.