Aug 8, 2011 8:46 PM by Trovette Tottress
The credit downgrade has local residents frustrated and angry at lawmakers in Washington. Many are worried about the future. They're wondering how it could have gotten this bad. News first 5's Trovette Tottress is going beyond the headlines.
It's a psychological blow.
"It kind of puts me in panic mode, "said Connie Varring.
In an already fragile economy.
"I don't think we can continue spending money that we don't have, " said Dan Gieck.
Colorado residents are on edge about our future.
On Friday, Standard & Poors lowered the United States AAA credit rating to AA+ which could mean higher interest rates on car loans, mortgages, and credit cards.
Pat Foltz says she was afraid something like this would happen.
"Because I felt like our government was acting in such an irresponsible manner", said Pat Foltz. "Somebody was going to do something dramatic to try and get our attention.
Dan Gieck says he's frustrated by the entire situation.
"People back at Washington, you can't trust them," said Dan Gieck.
"The fact that we were told for the last two weeks that the downgrade wouldn't happen if we were to raise the debt ceiling."
Economist Fred Crowley says it will affect most Americans.
"If the government is now borrowing at 2 percent, before the downgrade. And I could borrow at 3%, the government may now have to borrow at 5 percent", said Fred Crowley. "A three point extra risk premium. I am still three points riskier than the government. My rate of interest is going to go to six percent."
Just as an example, a 1.15% interest rate increase on a $200,000 loan would cost you $36, 562 more in interest payments over the course of the loan.
But there may be a little light at the end of the tunnel.
"When the economy slows down, we see oil prices drop", said Fred Crowley. "That may offset the increase of interest rates."
But as of now, many people like Connie Varring's only concern is her kids future.
"It makes us wonder will they be able to afford to go to college", said Connie Varring.
And their message to the government...
"I would just plead for the government to get their act together", said Pat Foltz.
In Colorado Springs, Trovette Tottress News First 5.
7 hours ago