Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Sky No Longer the Limit for U.S. National Debt

Interest-Rates / US Debt Sep 12, 2012 - 03:03 AM GMT

By: Pravda

Interest-Rates

The U.S. national debt has hit a new record. It has long been clear that no one can handle the problem. Therefore, the term, which the U.S. will need to come close to the legislative ceiling of this indicator, remains the main topic for speculation and forecasts. It is possible that the Americans will make it during the remaining several months of 2012.


The favorite subject of fierce fighting between Republicans and Democrats becomes relevant again. A few days ago, the U.S. Treasury announced that the national debt of the country exceeded $ 16 trillion for the first time. Each taxpayer owes creditors of the United States 140,000 dollars. According to the U.S. Census Bureau, there are a little more than 314 million people living in the country, and 114 million of them are taxpayers.

This does not either surprise or frighten anyone. However, in this case, the U.S. has come too close to the legislative limit of the debt, which was set at the level a bit below $16.4 trillion. Experts note that the country will reach this limit already this year. If there is no new law approved to raise the debt ceiling, the U.S. will no longer be able to borrow money to pay its obligations, the Voice of America said.

In February, the U.S. national debt stood on the level of $15.977 trillion. The country's budget deficit for 2012 fiscal year is forecast at $1.1-1.2 trillion. Back in 2007, the U.S. national debt made up $ 9 trillion. In 2011, after a heated debate between Republicans and Democrats, the country raised the borrowing limit, albeit with immense difficulty.

Anna Bodrova, an analyst with Investkafe, says: "They raised the limit deliberately to the desired level mindful of the fact that the country will go to the polls in November 2012. Both Republicans and Democrats needed that, because there are two bright representatives from the two parties participating in the race.

"Now it is clear that shortly before the election, the national debt can reach the ceiling set a year ago. If so, the first thing that the president-elect will face will be confrontation with the Congress over adjustments in the law that allow a raise for the debt limit. Thus, it is obvious that the situation is hopeless. On the one hand, it is risky to follow the beaten path. S&P has warned before that it would downgrade the U.S. rating if last year's political battle repeats again. On the other hand - so what? The United States has been living in debt for decades, and the country is ok about it.

"To date, the budget deficit in the U.S. is $ 1.2 trillion. It is clear that there is no money in the treasury to solve the problem - it is impossible to pay the huge debt of many years in one fell swoop. Maybe they should not repay this debt at all. Barack Obama's chief adviser David Axelrod has recently noted that the American leader had a credible plan on how to reduce the deficit, but the plan is unlikely to work in the near future. One has to understand: reducing the deficit now means stopping all movement within the economy. For the global market, which can hardly move right now, it will be a stab in the back."

Republicans interpret this situation in their favor, of course. One of the most powerful Republicans, House Speaker John Boehner, said Tuesday that the record debt became another sad reminder of the fact that President Obama did not keep his promise to halve the deficit. Spokesman for the Obama campaign headquarters Ben Labolt told Yahoo! News that when it comes to the growing national debt, Republicans would have to repeat one of the slogans that was said many times at their convention last week: "We built it!"

The U.S. budget deficit makes up $ 1.2 trillion. The largest expenditure articles of the U.S. budget include the spending on health program "Medicare" and "Medicaid" - just over $789 billion. Moreover, no other government would risk cutting the spending further. In fact, America takes the problem of its public debt philosophically. No one remembers the time when the U.S. was debt-free. However, for the current government this is still a problem. A very big one.

Valentin Vasspard

Bigness

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in