How debt ceiling battle may impact your wallet, NBA preps for Wembanyama: 5 Things podcast

On today's episode of the 5 Things podcast: Debt ceiling battle: How's it affect your wallet?

USA TODAY Graphics Editor Jim Sergent discusses how the potential debt ceiling crisis could hit Americans' finances. Plus, Bryan Kohberger, the student accused of stabbing and killing four University of Idaho students in November, has been indicted by a grand jury, the Supreme Court denies a request from gun rights groups to block Illinois laws banning the sale of certain semi-automatic rifles, the future of a popular abortion pill is up in the air, and USA TODAY NBA Reporter Jeff Zillgitt looks at the hype around Victor Wembanyama, potentially the next basketball superstar.

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Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.

Taylor Wilson:

Good morning. I'm Taylor Wilson and this is 5 Things you need to know Thursday, the 18th of May 2023. Today, what happens to Americans' money if an agreement is not reached over the debt ceiling? Plus, we're days away from a new arraignment in the Idaho stabbings, and we look at the latest generational talent coming to the NBA.

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A standoff continues over raising the debt ceiling and if an agreement isn't reached soon, we could be in for economic catastrophe. What does that mean for American wallets? I spoke with USA TODAY Graphics Editor Jim Sergent for more. Jim, thanks for hopping on the show.

Jim Sergent:

Thanks for having me.

Taylor Wilson:

We're getting down to the wire on debt ceiling negotiations. The clock is ticking. Just two weeks to go. Jim, about half the country owns stocks directly or indirectly through a mutual fund or a 401(k). What can they expect if the debt ceiling either isn't raised in time or worse, the US defaults?

Jim Sergent:

I think anyone should be able to probably expect that the closer we get to the X day, which is the term everyone uses for the day when we would default, the markets will get shaky. That's my technical term for volatility. Right now, the only place you've really seen unsettled investors is in the bond market where four-week T-bills have jumped to their highest rates ever in the first auction in May because investors are asking for a higher return on the off chance that the US might default. And then if you're looking at the stock market right now, it's been trading a really tight 3% range in recent days so maybe you're already seeing that the market is getting a little cautious about where these talks are going.

Taylor Wilson:

And Jim, you mentioned the stock market. How does what's happening in the market right now compare with the 2011 debt crisis?

Jim Sergent:

It's funny how similar it is actually right now. It's kind of at that same stage the stock market was also trading in a pretty narrow range, and then as you came very close to the X date, you saw the market start to crumble. The biggest part of the 15% decline, though, following that really happened when Standard & Poor downgraded the US debt from super, super safe to just a little bit less safe. But that really shook the markets thinking that the US bonds were not the safest thing that you could ever invest in.

Taylor Wilson:

Ahead of a potential debt crisis, are there things Americans can do right now to hedge their bets on this?

Jim Sergent:

Well, I guess if you're considering investing in the stock market, maybe hold off. Ironically, consider putting some of your investment money into a four-week T-bill, which has actually been paying over 5% in the last couple of weeks because of the standoff.

But also, if you're thinking you might use some of your investment money in the near future, in the next few months, these next few days could be an important window for you. In our case, our son is about to start college. The majority of his 529 money is still in stocks. Maybe not the best thing I could have done, but regardless, that's where it is. And it might be worthwhile to shift a little bit of what we might use in the first year of his education, move it into something more like money market or bonds.

On the other end of the spectrum, my wife and I don't expect to use any of our retirement money for at least 10 years or so. So what's likely to happen will be a speed bump in our investment that we won't ever remember in 10 years from now, most likely.

Taylor Wilson:

And Jim, we know this is already a tricky time with certain pandemic era benefits coming to an end. What's the risk here for more vulnerable Americans? Thinking about those on food stamps and those who depend on social security especially.

Jim Sergent:

They could really be the first people to feel the effects of a default or the treasury's last gasp to keep the federal government out of default. The treasury, what they could try to do is just pay off the interest for the next few days, which then people wouldn't receive their Medicare payments or there wouldn't be any money going to food programs potentially. Once you start having constituents feel the impact of this dispute, I wouldn't be surprised if the ceiling gets raised very quickly or also suspended, which has happened many times in the last few years.

And one other point to note. Deutsche Bank, a report that we have cited a few times, points out that a default might not even happen until the end of summer. So corporate taxes are due in mid-June, and so should that money start flowing in, in the next few days, you could have this unfortunately drag out throughout the summer without any resolution.

Taylor Wilson:

And finally, Jim, are there any downstream risks that we should be aware of as it pertains to this crisis?

Jim Sergent:

Should default happen, then all the money that usually flows out of the federal government into our economy could create some significant issues. Treasury Secretary Janet Yellen this week said the stock market could tumble as much as 45% and the economy could lose as many as eight million jobs, basically doubling the unemployment rate. Personally, I'm a bit skeptical about those numbers and exactly how permanent they would be. So regardless, I think we can all just hope that something gets figured out.

Taylor Wilson:

Here's to hoping. Jim Sergent, great insight on this. Thanks so much.

Jim Sergent:

Thank you.

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Taylor Wilson:

Bryan Kohberger, the criminology student accused of stabbing and killing four University of Idaho students in November has been indicted by a grand jury and will appear for arraignment on Monday. He's already been charged directly by prosecutors, but a grand jury indictment allows the case to be transferred directly to a higher level court. Authorities say that DNA evidence left at the scene ties Kohberger to the deaths of Ethan Chapin, Madison Mogen, Kaylee Goncalves and Xana Kernodle. Investigators have not revealed a potential motive in the killings, but the father of one of the victims said he believes Kohberger was stalking her. A surviving roommate said she saw a tall, thin, masked man with bushy eyebrows inside the house after hearing noises coming from another bedroom. Stay with 5 Things next week for more coverage of the arraignment.

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The Supreme Court yesterday denied a request from gun rights groups to temporarily block laws in Illinois that ban the sale of certain semi-automatic rifles and high capacity magazines. That means the prohibitions will remain in effect for now. The decision, which is preliminary, is the latest move where the high court declined to intervene in a Second Amendment challenge after its decision last year to expand the ability of Americans to carry handguns in public. The type of weapons banned have been used in several mass shootings, including one outside of Chicago last July when seven people were killed and dozens more were injured.

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A panel of three federal court judges heard arguments yesterday in a case that could force a major abortion pill off the market. That even includes in states where abortion is legal. The case hinges on whether the FDA's approval of mifepristone and actions making the drug easier to obtain should be rolled back. The panel of judges on the New Orleans-based Fifth US Circuit Court of Appeals is considered among the most conservative in the country. They're the latest to weigh in after a federal judge in Texas ordered a hold on FDA approval of mifepristone in April. The Supreme Court last month decided the drug will remain available as the case makes its way through the court system. Abortion rights advocates say the case has the potential to decimate nationwide access to medication abortion, which makes up over half of all abortions in the US.

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Victor Wembanyama. If you don't know that name already, you probably will soon as one of the potential next superstars in basketball. I spoke with USA TODAY NBA Reporter Jeff Zillgitt to get a sense of just how good Wemby could be.

Thanks for hopping on the podcast, Jeff.

Jeff Zillgitt:

Yeah, no problem. Look forward to this conversation.

Taylor Wilson:

So you and many others have called Victor Wembanyama one of the most highly anticipated prospects in the history of the NBA. What makes him so special, Jeff?

Jeff Zillgitt:

I think it's the skillset and the size that he is going to bring to the NBA. And I know, look, some of this is starting to take on hyperbole that is going to be difficult for an individual to match, but it's similar to the hyperbole that LeBron James entered the league with in 2003 coming out of high school. And so the hyperbole is going to be this. With his size at over seven foot, and there's some differing opinions on actually how tall he is, but some seem to think with basketball sneakers, he's seven foot five, he's got the kind of game that if you potentially combine Kevin Durant with Giannis Antetokounmpo, you have that same kind of size, someone who's good outside and someone who is good inside. He's got the skillset of a guard and a big man.

And what we've seen over the handful of past decade, we've used this phrase talking about generational NBA players as unicorns. We've referred to LeBron that way. These guys whose size contradicts everything that they can do on the court, they're just that gifted. And this has been a long time coming for Victor Wembanyama just the way he grew up and the way he was trained, and now we're seeing what he potentially can do in the NBA, and that's why there's so much hype.

Taylor Wilson:

Yeah, he seems like the all around package. Is there any part of his game that worry scouts?

Jeff Zillgitt:

Well, look, I think like every player entering the NBA, he's going to have to improve his outside shooting, but rarely does a rookie enter the league with a super proficient three-point shot.

The other thing is there's going to be a muscle training program for Victor Wembanyama. When he really starts preparing for the NBA after his season in France is over, he'll probably take a break and then start getting ready for the NBA Summer League in Las Vegas in July. And being in the weight room is going to be a big part of his development. Because early on, he's going to get pushed around even at his height by some of the big men in the league. And so those are a couple of areas that he is going to have to work on. But when you talk about the skillset he's coming in with - the ability to shoot, pass, rebound, block shots, defend multiple positions, whether it's a point guard or a big man - that's everything that scouts and executives are looking at right now.

Taylor Wilson:

And the San Antonio Spurs have won the NBA draft lottery. That means we all, barring a maybe historic gaffe, expect them to go with Wembanyama in the draft. How quickly will he make an impact for them, Jeff?

Jeff Zillgitt:

Any rookie coming into the league has a learning curve. The Spurs were bad last season. That's why they had among the best odds with two other teams of winning the draft lottery and getting the number one pick. They don't have great players and they're in a rebuilding and development stage. They do have some young talent to work with. He's going to make them a better team. He's not going to convert them automatically into a playoff team or a contender because this takes time. It even took LeBron James a little bit of time to figure that out and turn the Cavaliers from a losing team to a championship contending team right before he left. And so that same sort of development arc is going to exist with Wembanyama.

But when you think about that, you're going to become a better team much faster with him than if you didn't have him. What other moves do the Spurs make with their player personnel to make the roster better sooner? All those things will play a part in how fast the Spurs become a contender, but it is a really great situation for him, giving that Spurs coach Gregg Popovich, has extensive experience coaching international players.

Taylor Wilson:

One of the best out there covering the NBA, Jeff Zillgitt. Thanks so much.

Jeff Zillgitt:

Thank you.

Taylor Wilson:

Thanks for listening to 5 Things. If you like the show, please subscribe and leave us a rating and review on Apple Podcasts. And if you have any comments, you can reach us at podcasts@usatoday.com. I'm back tomorrow with more of 5 Things from USA TODAY.

This article originally appeared on USA TODAY: Appeals court weighs abortion pill, Wembanyama mania: 5 Things podcast