Debt Ceiling Is Caving In
Original post made by Cindy Cross on Jul 14, 2011
News about the debt ceiling has been non-stop lately. With the impending dead-line of August 2nd quickly approaching, many Americans are scratching their heads without a clear understanding of exactly what it means.
The debt ceiling is like a credit card limit. Once you reach your credit card limit, you have reached the maximum you can charge, and are in trouble if you need to spend more. The debt ceiling for the United States is currently $14.3 Trillion. The U.S. Treasury has borrowed only enough money to pay all its debts through August 2nd. The U.S. 'credit card' will officially be maxed-out in a few short weeks.
Here are a few possible scenarios if the August 2nd date comes and the debt ceiling isn't raised:
• The U.S. dollar will suffer hyper-inflation since its value will be severely devalued.
• Loans of any kind will be hard to get, and hold huge interest rates.
• Raising interest rates will make the value of bonds held in 401Ks go down.
There are many politicians who have no doubt that the debt ceiling will be raised, but fear that if they agree to it, they will have constituents back home who will punish them by withholding votes at election time.
Mitch McConnell, Senate Minority leader (Rep.-Kentucky) said in a recent interview, "I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy," he said.
As a result of trying to distance themselves from Obama, Republicans drafted a "back-up plan" which would allow Obama to raise the debt ceiling without any Republican support.
Republicans, united in their determination to only raise the debt limit with fiscal reform, have insisted on massive spending cuts in exchange for their votes.
"If these debt negotiations have convinced us of anything, it's that we can't leave it to politicians in Washington to make the difficult decisions they need to get our fiscal house in order," said McConnell. "The balanced budget amendment will do that for them."
We shall see.
on Jul 15, 2011 at 11:53 am
Politics at all costs, especially those costs borne by you and me the tax payer. The two party system is so partisan that now the republicans vote in a monolithic block, with no so much as a single member crossing the aisle to vote his or her conscience. Which leaves us with policy that does not reflect what is best for the American people, but rather what is best for the powers that be that fund the lobbyist who pocket the vote of the elected representative you and I count on to lead the way. Not now and probably never again.
on Jul 16, 2011 at 7:53 am
Much ado about nothing. Wall Street does not want a govt shutdown as it would disrupt their money-gouging operations. Repubs are currently marching in lockstep, but when push comes to shove they won't bite the hand that feeds them, and several will follow Obama's lead 'for the betterment of the country'. Right now they're following an ideological agenda that has them looking silly in the public's eyes.
on Jul 19, 2011 at 9:45 pm
The politicians in Washington remind me of two children on the play ground fighting over something stupid. To think that Washington politics has lead us to this point in history, broke. Maybe we need to rethink term limits for these crafty politicians. Clean house of the old guys who do nothing but line their own pockets and dont give a damn about the working women and men who pay them their salaries.