Democrats Says Debt Default Could Harm PFD

Posted: October 11, 2013 at 12:00 pm

Using a recent Department of the Treasury report on possible impacts of a U.S. debt default, the Alaska Democratic Party is painting a dire picture for local families. Their calculations extend as far as the Alaska Permanent Fund.

 

The ADP’s Zack Fields explains…

 

Fields: “There’s certainly a possibility that whatever happens in the stock market as a whole also is going to happen for the stock held in the permanent fund. So, if the stock market goes down, let’s just say 2.7 percent, as it has during this GOP shut down, then we could be seeing similar effects in the permanent fund. And the question is: if the country is pushed to default and the impact on the stock market is that much worse, how much more would the value of the permanent fund decline?”

 

Fields clarified that any impact to the fund wouldn’t result in an instant decrease in the annual dividend, since the checks are calculated using the last five years worth of returns.

 

Michael Burns, Executive Director for the fund , said it’s still too early to start making these predictions…

 

Burns: “It’s speculation we wouldn’t want to get into.”

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